Freeman Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $150,000 and direct labor hours would be 10,000. The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labor hours. The cost records for the year will show:
a. overapplied overhead of $30,000.
b. underapplied overhead of $30,000.
c. underapplied overhead of $6,000.
d. overapplied overhead of $6,000.