Is the factory overhead from Exercise 6 over- or under/applied? If Cards by Shannon has a March 31 fiscal year-end, prepare the journal entry required to dispose of the balance in Factory Overhead.

Exercise 6

Cards by Shannon allocates factory overhead based upon hours used by a piece of equipment. At the beginning of the period, the company estimates factory overhead to be $25,000 and expects the equipment to be used for 4,000 hours. During the period Job 22 requires 1,900 hours of use of the equipment, Job 23 requires 1,700 hours, and Job 24 requires 100 hours. As of March 31, actual indirect costs include: $4,000 for indirect materials, $9,100 for indirect labor, $6,000 for utilities, and $5,200 for equipment depreciation.