Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 120% of direct labor cost. Selected data concerning the past year's operation of the company are presented below.

	January 1	December 31
Direct materials	$ 93,000	$ 56,000
Work in process	82,000	58,000
Finished goods	131,000	116,000
Other information
Direct materials purchases		$ 340,000
Cost of goods available for sale		950,000
Actual factory overhead costs		276,000

The amount of underapplied or overapplied overhead is:

Multiple Choice

• $48,000 underapplied.

• $0.

• $48,000 overapplied.

• $86,000 overapplied.

• $86,000 underapplied.