Balloons, Inc. has actual overhead costs of $162,000 and budgeted overhead costs of $178,500 for 20x0. Balloons applied overhead based on machine hours. Actual and budgeted machine hours for 20x0 are 20,000 and 21,000, respectively. For 20x0, Balloon has:

A. overapplied overhead, $8,000. C. underapplied overhead, $8,000.

B. overapplied overhead, $16,500. D. underapplied overhead, $16,500.