The following information was gathered for the ABC Company for the year ended December 31, 2019. Estimated direct labor hours Actual direct labor hours Estimated manufacturing overhead Actual manufacturing overhead $670,000 32,500 35,000 $650,000 Assuming that overhead is applied based on direct labor hours, which of the following is correct?

overhead is underapplied by $50000

overhead is overapplied by $30000

overhead is underapplied by $30000

overhead is overapplied by $ 50000