In reviewing the accounting records at year-end, Garff Company”s accountant has determined that the following items and amounts were debited to the Manufacturing Overhead account during the year:
|
Factory supervisor’s salary |
$8,000 |
|
Sales commissions |
$7,000 |
|
Vacation pay for the materials storeroom clerk |
$2,000 |
Including the items listed above, the debits to the Manufacturing Overhead account totaled $245,000 for the year. Credits to the account totaled $240,000 for the year. Based on this information, if all entries had been made correctly during the year the Manufacturing Overhead account would have been:
A) overapplied by $4,000
B) overapplied by $12,000
C) underapplied by $5,000
D) overapplied by $2,000