Carlo Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. The company estimated manufacturing overhead at $255,000 for the year and direct labour hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totalled $270,000; actual direct labour hours were 105,000. What was the overapplied or underapplied overhead for the year?

Overapplied $2500

Overapplied $15000

Underapplied $2500

Underapplied $15000