Carlo Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. The company estimated manufacturing overhead at $255,000 for the year and direct labor-hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totaled $270,000. Actual direct labor hours were 105,000. What was the overapplied or underapplied overhead for the year?
a. $2,250 overapplied.
b. $2,250 underapplied.
c. $15,000 overapplied.
d. $15,000 underapplied.