The Following Calendar Year Information About the Tahoma Corporation Is

question 89

Essay

The following calendar year information about the Tahoma Corporation is available on December 31:
$$\begin{array} { l r } \text { Advertising expense } & \$ 28,800 \\\text { Depreciation of factory equipment } & 42,320 \\\text { Depreciation of office equipment } & 10,800 \\\text { Direct labor } & 142,600 \\\text { Factory utilities } & 35,650 \\\text { Interest expense } & 6,650 \\\text { Inventories, January 1: } & \\\quad \text { Raw materials } & 3,450 \\\quad \text { Goods in process } & 17,250 \\\quad \text { Finished goods } & 35,650 \\\text { Inventories, December 31: } & \\\quad \text { Raw materials } & 2,300 \\\quad \text { Goods in process } & 20,700 \\\quad \text { Finished goods } & 31,050 \\\text { Raw materials purchases } & 132,450 \\\text { Rent on factory building } & 41,400 \\\text { Indirect labor } & 51,750 \\\text { Sales commissions } & 16,500\end{array}$$
The company applies overhead on the basis of 125% of direct labor costs. Calculate the amount of over- or underapplied overhead.

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Definitions:

Build A Bear Shop

A retail company and concept where customers can create, personalize, and purchase their own stuffed animals through an interactive process.

Total Revenue

The overall amount of money generated by a firm from selling its goods or services, calculated as the quantity sold multiplied by the price of the goods.

Average Revenue

The amount of income generated per unit of sales or product sold, calculated by dividing total revenue by the number of units sold.

Competitive Firm

A business entity in a market where numerous sellers compete to sell their goods or services, implying no single seller controls the market prices.