The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year:

Raw MaterialsDebitCredit

Beginning Balance

5,300

9,600

5,500

Work in ProcessDebitCredit

Beginning Balance

4,400

22,500

6,500

8,800

8,600

Finished GoodsDebitCredit

Beginning Balance

2,500

20,700

22,500

Manufacturing OverheadDebitCredit

3,100

8,600

3,800

3,500

Wages & Salaries PayableDebitCredit

20,700

Beginning Balance

2,800

12,600

Cost of Goods SoldDebitCredit

20,700

The manufacturing overhead was:

Multiple Choice

$1,800 overapplied

$3,500 overapplied

$1,800 underapplied

$3,500 underapplied

To determine whether the manufacturing overhead is overapplied or underapplied, we need to first analyze the **Manufacturing Overhead T-account**.

### Step 1: Understand Manufacturing Overhead T-account
- **Debits** in the manufacturing overhead T-account typically represent the actual overhead costs incurred.
- **Credits** represent the overhead applied to work in process.

The Manufacturing Overhead T-account is shown below:

| **Manufacturing Overhead** | **Debit** | **Credit** |
|----------------------------|-----------|------------|
|                            | **3,100** |            |
|                            | **3,800** |            |
|                            |           | **8,600**  |
|                            |           | **3,500**  |

- **Total debits**: 3,100 + 3,800 = **6,900** (Actual overhead costs)
- **Total credits**: 8,600 + 3,500 = **12,100** (Overhead applied)

### Step 2: Calculate Overapplied or Underapplied Overhead
The difference between the actual overhead and the applied overhead determines if the overhead is overapplied or underapplied.

- **Overhead applied** (credits) = 12,100
- **Actual overhead** (debits) = 6,900

Now, subtract the actual overhead from the applied overhead:
\[
12,100 - 6,900 = 5,200 \text{ (Overapplied)}
\]

### Conclusion:
The overhead is **$5,200 overapplied**. However, this specific answer is not an option in the choices given. Since the available options include $3,500 overapplied, it is possible that some data from the T-accounts was misinterpreted or omitted. You may want to recheck any other transactions or assumptions in the accounts.

Learn how to determine if the manufacturing overhead is overapplied or underapplied using T-accounts. This problem involves analyzing debits and credits for Manufacturing Overhead, Work in Process, and other accounts to calculate the difference between applied and actual overhead. Perfect for college-level accounting students.

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