Beaver Company used a predetermined overhead rate last year of $2 per direct labor hour, based on an estimate of 25,000 direct labor hours to be worked during the year. Actual costs and activity during the year were:
Actual manufacturing overhead cost incurred: $47,000
Actual direct labor hours worked: 24,000
The under-or overapplied overhead last year was:
a. $1,000 underapplied.
b. $1,000 overapplied.
c. $3,000 overapplied.
d. $2,000 underapplied.