Malcolm Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs.

The estimates for the year were:
Manufacturing overhead	$16,240
Direct labor hours	11,600
The actual results for the year were:
Manufacturing overhead	$21,700
Direct labor hours	13,000

The cost records for the year will show

Overapplied overhead of $5,460.

Underapplied overhead of $5,460

Overapplied overhead of $3,500.

Underapplied overhead of $3,500