Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $189,000 of raw materials on credit; issued materials to production of $214,000 of which $11,000 were indirect. Minstrel incurred a factory payroll of $158,000, of which $21,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. If Minstrel incurred total overhead costs of $194,800 during the month, compute the amount of under- or overapplied overhead:

Multiple Choice

• $42,200 overapplied.

• $36,800 underapplied.

• $10,700 underapplied.

• $36,800 overapplied.

• $10,700 overapplied.