Question:
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:
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Factory supervisor's salary
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$8,000
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Sales commissions
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$7,000
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Vacation pay for the materials storeroom clerk
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$2,000
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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