Wrango Company is a manufacturer that uses a job-order-costing system. Wrango purchases 100% of its raw materials on account from vendor Coose Company and the company disposes of any over/under applied overhead using the method covered in class. 75% of the company's building square footage relates to manufacturing activities while 25% is used for non-factory purposes.

Tango provides the following account balances from the company's official financial statements:

Additionally, the company provides the following information regarding 2020 activity:

*items included in the "other indirect factory cost" category are unrelated to the building.

Assume for purposes of this question that Wrango applies overhead using direct labor dollars as a cost driver. Select the answer below that shows the over or under applied overhead.

Group of answer choices

$7,000 overapplied

$5,000 overapplied

$7,000 underapplied

$5,000 underapplied

$32,000 overapplied

$32,000 underapplied

None of the answers provided are correct

12/31/2019 Raw Materials $15,800 Work In Process $35,700 Finished Goods $111,100 Accounts Payable-Valor $4,600 12/31/2020 $18,200 $62,100 $97,900 $3,800 Additionally, the company provides the following information regarding 2020 activity: Raw Material Purchases Direct Labor Selling & Administrative Expenses Building Depreciation Other Indirect Factory Cost* January 1- December 31, 2020 Budgeted Actual $180,000 $175,000 $260,000 $254,000 $345,000 $328,000 $80,000 $80,000 $460,000 $453,000 Machine Hours Direct Labor Hours 20,800 6.500 21,200 6.615