10. Mason Co. uses a job-order cost system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct-labor dollars. The rate for the current year is 200% of direct-labor dollars ($2.00 of overhead is applied for every $1.00 of direct labor cost). This rate was calculated last December and will be used throughout the current year. Mason had one job, No. 150, in process onAugust 1 with raw materials costs of $3,000. During August, raw materials and direct labor added to jobs were as follows: Job #150 Job #151 Job #152 Raw materials $ -- $4,000 $1,000 Direct labor $1,500 $5,000 $2,500 Actual manufacturing overhead for the month of August was $20,000. During the month, Mason completed Jobs Nos. 150 and 151. For August, manufacturing overhead was a. Overapplied by $4,000 b. Underapplied by $7,000 c. Underapplied by $2,000 d. Underapplied by $1,000