Question. The following calendar year information about the Tahoma Corporation is available on December 31:
Advertising expense.................28,800
depreciation of factory equipment...42,320
depreciation of office equipment....10,800
direct labor........................142,600
factory utiXXties...................35,650
interest expense....................6,650
inventories Jan. 1
Raw materials....................3,450
Goods in process.................17,250
finished goods...................35,650
inventories Dec. 31
Raw materials....................2,300
Goods in process.................20,700
Finsished goods..................31,050
Raw materials purchases.............132,450
Rent on factory building............41,400
Indirect labor......................51,750
Sales commissions...................16,500
The company applies overhead on the basis of 125% of direct labor costs. Calculate the amount of over- or underapplied overhead.