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

Direct labor $$31,000$

Bonuses paid to factory supervisors $9,000$

Interest expense $32,000$

Depreciation on manufacturing equipment $18,000$

Indirect labor $11,000$

Direct materials $36,000$

Income tax expense $26,000$

Indirect materials $14,000$

Property taxes on the corporate office building $18,000$

Estimated direct labor hours were $40,000.$

Actual data for Year $1$ are as follows:

Total manufacturing overhead: $$120,000$

Direct labor hours: $60,000$ hours

The predetermined manufacturing overhead rate is determined on the basis of direct labor hours. Which ONE of the following statements is TRUE?

Applied overhead was MORE than actual overhead by $$22,000.$

Applied overhead was LESS than actual overhead by $$22,000.$

Applied overhead was MORE than actual overhead by $$42,000.$

Applied overhead was LESS than actual overhead by $$42,000.$