Water Sports, Inc. uses a predetermined overhead rate based on direct labor costs. For the current year, the company estimated overhead to be $300,000, based on budgeted production of 20,000 direct labor hours at $6 per hour. Actual overhead for the period was $290,000, with actual direct labor costs of $110,000. What was the over- applied or under-applied overhead for the period? a. $25,000 over-applied.
B) $25,000 under-applied.
C) $15,000 over-applied.
D) $15,000 under-applied.
E) None of the above.

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The Answer of Water Sports, Inc. uses a predetermined overhead rate based on direct labor costs. For the current year, the company estimated overhead to be $300,000, based on budgeted production of 20,000 direct labor hours at $6 per hour. Actual overhead for the period was $290,000, with actual direct labor costs of $110,000. What was the over- applied or under-applied overhead for the period? a. $25,000 over-applied.
B) $25,000 under-applied.
C) $15,000 over-applied.
D) $15,000 under-applied.
E) None of the above.