#6

A company has provided the following information for the upcoming year:

Estimated labor hours 15,000

Actual direct labor hours 14,500

Estimated overhead $120,000

Actual Costs

Taxes on factory $10,000

Factory maintenance $15,000

Indirect material $7,000

Factory electricity $9,500

Direct labor $50,000

Direct material $8,000

Rent on Administrative offices $30,000

Production supervisor's salary $48,500

Factory custodian's salary 28500

What is the amount of the underapplied or overapplied overhead if the company applies overhead upon labor hours?

$3,000 underapplied

$4,000 overapplied

$6,100 underapplied

$12500 overapplied