Answer:
The correct answer is $5,000.
Explanation:
According to the scenario, the given data are as follows:
Total raw material = $118,000
Direct material = $89,000
So, Indirect material = Total raw material - Direct material = $118,000 - $89,000
= $29,000
Total labor = $142,000
Direct labor = $122,000
So, Indirect labor = Total labor - Direct labor = $142,000 - $122,000
= $20,000
Additional actual manufacturing OH = $214,000
Applied manufacturing OH = $268,000
So, we can calculate the underapplied or overapplied overhead for the month by using following formula:
Underapplied or overapplied overhead = Applied manufacturing OH - Actual OH
= $268,000 - ( $29,000 + $20,000 + $214,000)
= $268,000 - $263,000
= $5,000
Hence, the overapplied overhead is $5,000.
