Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $104,720 and 3,400 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $106,520 and actual direct labor-hours were 3,200.
The overhead for the year was:
$6,160 overapplied
$6,160 underapplied
$7,960 underapplied
$7,960 overapplied