Jones Farms, Inc. which uses machine hours to compute its predetermined overhead rate, budgeted total manufacturing overhead of $100,000 and total machine hours of 50,000. Total actual overhead cost for the period was $108,000 and actual machine hours totaled 52,000.

How much is manufacturing overhead over or under applied for the period?

Multiple Choice

$4,000 underapplied

$8,000 underapplied

$8,000 underapplied

$2,000 underapplied