CDS is an Advertising Agency that uses a job costing system. It applies overhead to jobs based on direct professional labour hours. At the beginning of the year, overhead was estimated to be $75,000, direct professional labour hours were estimated to be 15,000, and direct professional labour cost was projected to be $225,000. During the year, CDS incurred actual overhead of $80,000, actual direct labour hours of 14,500, and actual direct labour cost of $222,000.

What was Brainpower's over- or under-applied overhead during the year?

a.

$5,000 under-applied.

b.

$5,000 over-applied.

c.

$7,500 under-applied.

d.

$7,500 over-applied.

e.

Cannot be determined by the information given.