Ring of Power Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. The company estimated manufacturing overhead at $255,000 for the year and direct labour hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totaled $270,000, actual direct labour hours were 105,000. What was the overapplied or underapplied overhead for the year?

Select one:

1. $2,250 overapplied
2. $2,250 underapplied
3. $15,000 underapplied
4. $15,000 overapplied