Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $201,000 of raw materials on credit; issued materials to production of $198,000 of which $27,000 were indirect. Minstrel incurred a factory payroll of $153,000, of which $37,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. If Minstrel incurred total overhead costs of $180,000 during the month, compute the amount of under- or overapplied overhead:

Multiple Choice

• $27,000 overapplied.
• $6,000 underapplied.
• $49,500 overapplied.
• $27,000 underapplied.
• $6,000 overapplied.