Pre-determined overhead (POHR) for the period is $2.40 direct labor hour (DLH). Consider the following actual results for the period: (1) budgeted overhead = $120,000, (2) budgeted DLH = 50,000, (3) actual overhead = $200,000, and (4) actual DLH = 80,000. Compute the income effect of the resulting over(under) applied overhead.

Group of answer choices

Income increases $8,000

Income decreases $8,000

Income increases $72,000

Income decreases $72,000