VBK, Inc., applies overhead costs to its products using direct labor costs as its cost driver. For the most recent year, its budgeted overhead costs were $525,000, and its budgeted direct labor costs were $150,000.
During the year, VBK actually paid $140,000 for direct labor, and actual overhead costs were $530,000.

Required:
Determine the firm’s over- or underapplied overhead.