Water Sports, Inc

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.