Reyes Corporation applies overhead using an actual costing approach. Budgeted factory overhead was $271,296, budgeted machine-hours were 18,840. Actual factory overhead was $289,620, actual machine-hours were 19,390. How much overhead would be applied to production

$279216

Explanation:

Budgeted rate = = = 14.4

Budgeted factory overhead = $271296

Budgeted Machine hours = 18840

Actual overhead cost = $289620

Allocated overhead cost = actual hours * budgeted rate

                                         = 19390 * 14.4 = $279216

from the calculations it is noted that the allocated overhead cost is lower than the actual overhead cost incurred by the corporation hence the overhead cost was underapplied

actual overhead cost - allocated overhead cost

what are your options to your question?

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.