Underapplied Overhead on Interim Income Statements The following data are available for ABC Company covering the month of January 19_4.

Sales $100,000 Cost of sales (per account) 75,000 Factory overhead incurred 25,500 Factory overhead applied 22,100 Selling and administrative expenses 10,000 You are to prepare interim income statements for the month of January:

Assuming underapplied overhead is immediately chargeable to the period.

2. Assuming underapplied overhead as a cost that will benefit the rest of the year’s production. lop4