During the Year,Paul Company Used a Predetermined Overhead Rate of $3.50

Multiple Choice

During the year,Paul Company used a predetermined overhead rate of $3.50 per direct labour hour,based on an estimate of 22,000 direct labour hours to be worked during the year.Actual overhead cost and activity during the year were:
$\begin{array}{|l|l|}\hline \begin{array}{l}\text { Actual manufacturing overhead cost } \\\text { incurred }\end{array} & \$ 90,000 \\\hline \text { Actual direct labour hours worked } & 25,000 \\\hline\end{array}$
What was the under- or overapplied overhead for the year?

A) $2,500 overapplied.
B) $2,500 underapplied.
C) $10,500 overapplied.
D) $13,000 underapplied.