Towson Co. uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. For the month of July, Towsons estimated manufacturing overhead cost was $300,000 based on an estimated activity level of 150,000 direct labor-hours. Actual overhead amounted to $260,000 with actual direct labor-hours totaling 120,000 for the month. How much was the over applied or under applied overhead? And what change should the company make in terms of cost of goods sold to balance the manufacturing overhead account? A. $20,000 over applied, decreases cost of goods sold $20,000 B. $20,000 under applied, increases cost of goods sold $20,000 C. $25,000 over applied, decreases cost of goods sold $25,000 D. $25,000 under applied, increases cost of goods sold $25,000