[Note] This question and the next (or previous) question are based on the same data! Plimpton Company produces countertop ovens. Plimpton uses a standard costing system. The standard costing system relies on direct labor hours to assign overhead costs to production. The direct labor standard indicates that 4 direct labor hours should be used for every single oven produced. The annual budgeted production volume is usually 9,000 units per year. The budgeted overhead costs for the coming year are determined as follows: Fixed overhead Variable overhead $144,000 $180,000 Plimpton applies overhead on the basis of direct labor hours. During the year, Plimpton produced 8,000 units, worked 32,500 direct labor hours, and incurred total $295,000 of overhead costs, of which $134,000 is fixed overhead. Which of the following would be TRUE for the situation described above? The variable overhead costs were under-applied during the year. Total overhead variance during the year was $6,500 unfavorable. Total overhead variance during the year was $7,000 favorable. The fixed overhead costs were over-applied during the year