Culpepper Corporation had the following inventories at the beginning and end of the month of January: 

_____________________________ January 1 ______________January 31

Finished goods ………………… $125,000 ……………….. $117,000

Work-in-process ………………..       235,000 ………………..        251,000

Direct materials …………………      134,000 ………………..        124,000

The following additional manufacturing data was available for the month of January.

Direct materials purchased ………………..   $189,000

Transportation in …………………………..   3,000

Direct labor ………………………………..   400,000

Actual factory overhead ………………….    175,000

Culpepper Corporation applies factory overhead at a rate of 40% of direct labor cost, and any overapplied or underapplied factory overhead is deferred until the end of the year.

Culpepper’s balance in its factory overhead control account at the end of January was:

1. $15,000 overapplied.

2. $15,000 underapplied.

3. $5,000 underapplied.

4. $5,000 overapplied.