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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

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.

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