Derrald Company manufactures snowboards Estimated costs for Year 1 were as follows:

Direct labor $62,000

Bonuses paid to factory supervisors 18,000

Interest expense 64,000

Depreciation on manufacturing equipment 36,000

Indirect labor 22,000

Direct materials 72,000

Income tax expense 52,000

Indirect materials 28,000

Property taxes on the corporate office building 36,000

Estimated direct labor hours were 80,000.

Actual data for Year 1 are as follows:

Total manufacturing overhead:$240,000

Direct labor hours: 120,000 hours

The predetermined manufacturing overhead rate is determined on the basis of direct labor hours. What is the amount of over-or underapplied overhead for Derrald Company for Year 1?

a. $20,000 UNDER applied

b. $13,6000 UNDER applied

c. $84,000 UNDER applied

d. $32,000 OVER applied

e. $32,000 OVER applied

f. $111,000 UNDER applied

g. $52,000 UNDER applied

h. $80,000 UNDER applied