Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year. Actual costs and activity during the year were:

What was the under- or overapplied overhead last year?Multiple Choice

• $1,000 underapplied.

• $1,000 overapplied.

• $2,000 underapplied.

• $3,000 overapplied.