Bates Company used a predetermined manufacturing overhead rate last year of $5 per machine hour, based on an estimate of 30,000 machine hours to be used during the year. Actual manufacturing overhead cost incurred for the year was $160,000. Actual machine hours used during the year was 35,000. Batess under-applied or over-applied manufacturing overhead for last year was:

$10,000 over-applied

$15,000 over-applied

$15,000 under-applied

$10,000 under-applied