The overhead for the year was:

A) $2,792 underapplied
B) $3,842 overapplied
C) $2,792 overapplied
D) $3,842 underapplied

Overhead

Overhead refers to ongoing business expenses that are not directly tied to producing a specific product or service, such as rent, utilities, and administrative costs.

Underapplied

A situation where the allocated indirect costs are less than the actual indirect costs incurred.

Overapplied

A situation where the overhead costs applied to products or services exceed the actual overhead costs incurred.