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The Blake Company forecasts that total overhead for the current year will be $40,000,000 with 500,000 total machine hours. Year to date, the actual overhead

The Blake Company forecasts that total overhead for the current year will be $40,000,000 with 500,000 total machine hours. Year to date, the actual overhead is $35,000,000 and the actual machine hours are 440,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is

a. $5,000,000 underapplied

b. $200,000 underapplied

c. $200,000 overapplied

d. $5,000,000 overapplied

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