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Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on...

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Accounting

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 114,000 and estimated factory overhead was $695,400. The following information was for September. Job X was completed during September, while Job Y was started but not finished.

September 1, inventories:
Materials $9,000
Work-in-process (All Job X) 37,400
Finished goods 80,400
Materials purchases $125,000
Direct materials requisitioned:
Job X $54,500
Job Y 40,000
Direct labor hours:
Job X 5,000
Job Y 4,500
Labor costs incurred:
Direct labor ($6.00 per hour) $57,000
Indirect labor 16,200
Factory supervisory salaries 7,200
Rental costs:
Factory $8,400
Administrative offices 2,200
Total equipment depreciation costs:
Factory $9,000
Administrative offices 1,900
Indirect materials used $14,400

The underapplied or overapplied overhead for September is:

$2,750 underapplied.

$2,750 overapplied.

$920 overapplied.

$920 underapplied.

$1,450 underapplied.

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