Chapter 8, Problem 8.19MCQ

Culpepper Corporation had the following inventories at the beginning and end of the month of January:

	January 1	January 31
Finished goods	$125,000	$117,000
Work-in-process	235,000	251,000
Direct materials	134,000	124,000

The following additional manufacturing data was available for the month of January.

Direct materials purchased	$189,000
Transportation in	3,000
Direct labor	400,000
Actual factory overhead	175,000

Culpepper Corporation applies factory overhead at a rate of 40% of direct labor cost, and any overapplied or underapplied factory overhead is deferred until the end of the year.

Culpepper’s balance in its factory overhead control account at the end of January was:

1. 1. $15,000 overapplied.
2. 2. $15,000 underapplied.
3. 3. $5,000 underapplied.
4. 4. $5,000 overapplied.