Question
Karens Company is a manufacturer that uses a job-order-costing system. Tango purchases 100% of its raw materials on account from vendor wallers Company and the
Karens Company is a manufacturer that uses a job-order-costing system. Tango purchases 100% of its raw materials on account from vendor wallers Company and the company disposes of any over/under applied overhead using the method covered in class. 75% of the company's building square footage relates to manufacturing activities while 25% is used for non-factory purposes.
Tango provides the following account balances from the company's official financial statements:
Additionally, the company provides the following information regarding 2020 activity:
*items included in the "other indirect factory cost" category are unrelated to the building.
Assume for purposes of this question that Karen applies overhead using direct labor dollars as a cost driver. Select the answer below that shows the over or under applied overhead.
Group of answer choices
$7,000 overapplied
$5,000 overapplied
$7,000 underapplied
$5,000 underapplied
$32,000 overapplied
$32,000 underapplied
None of the answers provided are correct.
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