Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was estimated to be $160,000, direct professional labor hours were estimated to be 20,000, and direct professional labor cost was projected to be $360,000. During the year, Media incurred actual overhead costs of $159,000, actual direct professional labor hours of 19,500, and actual direct labor cost of $265,000. By year-end, the firm's overhead was:

$3,000 underapplied.

$3,000 overapplied.

$1,000 underapplied.

$1,000 overapplied.

$4,000 underapplied.