The Peterson Company uses a predetermined overhead rate of 120% of direct labour costs to apply manufacturing overhead. Estimated costs for the upcoming year are:

Direct materials $12,000

Advertising $4,000

Factory supplies $12,000

Indirect materials $11,000

Indirect labour $6,000

Sales commissions $6,000

Tools for factory equipment $2,000

If actual direct labour costs for the year were $19,000, manufacturing overhead will have been:

A) Underapplied by $8,200

B) Underapplied by $3,800

C) Underapplied by $2,000

D) Underapplied by $2,200