Question
The following calendar year information about the Tahoma Corporation is available on December 31: Advertising expense............................................................ $ 28,800 Depreciation of factory equipment....................................... 42,320 Depreciation of
The following calendar year information about the Tahoma Corporation is available on December 31:
Advertising expense............................................................ $ 28,800
Depreciation of factory equipment....................................... 42,320
Depreciation of office equipment.......................................... 10,800
Direct labor............................................................................ 142,600
Factory utilities....................................................................... 35,650
Interest expense.................................................................... 6,650
Inventories, January 1:
Raw materials.................................................................. 3,450
Goods in process............................................................. 17,250
Finished goods................................................................. 35,650
Inventories, December 31:
Raw materials.................................................................. 2,300
Goods in process............................................................. 20,700
Finished goods................................................................. 35,050
Raw materials purchased...................................................... 132,450
Rent on factory building......................................................... 41,400
Indirect labor.......................................................................... 51,750
Sales commissions............................................................... 16,500
What is the significance of this over- or under-applied amount of overhead?
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