The following cost data relate to the manufacturing activities of Black Company during the just-completed year:
|Manufacturing overhead costs:|
|Property taxes, factory||$||4,300|
|Total actual manufacturing overhead costs||$||59,700|
|Other costs incurred:|
|Purchases of raw materials.||$||38,500|
|Direct labour cost||$||49,100|
|Raw materials, beginning||$||10,600|
|Raw materials, ending||$||8,300|
|Work in process, beginning||$||7,950|
|Work in process, ending||$||10,100|
The company uses a predetermined overhead rate to apply overhead cost to production. The rate for the year was $6 per machine-hour; a total of 10,500 machine-hours were recorded for the year. All raw materials ultimately become direct materials—none are classified as indirect materials.
1. Compute the amount of underapplied or overapplied overhead cost for the year.