If a company applies overhead to production with a predetermined rate, a credit balance in the Factory Overhead account at the end of the period means that:

a) The overhead was underapplied for the period..

b) Actual overhead was less than the overhead amount charged to production.

c) The bookkeeper has made an error because the debits don't equal the credits.

d) The balance will be carried forward to the next period as an overhead cost.

I answered Actual overhead was less than the overhead amount charged to production.

But this answer is not correct.