Estimateddata for Lorien Company for Year 1 are as follows:

Direct materials to be purchased$35,000Indirect labor10,000Wages of janitors in corporate office building47,000Factory building rent60,000Depreciation on production equipment20,000Administrative office supplies25,000

Estimated direct labor hours: 40,000 hours

Actualdata for Year 1 are as follows:

Total manufacturing overhead: $110,000

Direct labor hours: 35,000 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 LESS than actual overhead by $10,000
• Applied overhead was MORE than actual overhead by $12,250
• Applied overhead was MORE than actual overhead by $31,250
• Applied overhead was MORE than actual overhead by $20,000
• Applied overhead was LESS than actual overhead by $31,250
• Applied overhead was MORE than actual overhead by $10,000
• Applied overhead was LESS than actual overhead by $20,000
• Applied overhead was LESS than actual overhead by $12,250