To determine whether the manufacturing overhead is overapplied or underapplied, we need to first analyze the Manufacturing Overhead T-account.

Step 1: Understand Manufacturing Overhead T-account

• Debits in the manufacturing overhead T-account typically represent the actual overhead costs incurred.
• Credits represent the overhead applied to work in process.

The Manufacturing Overhead T-account is shown below:

• Total debits: 3,100 + 3,800 = 6,900 (Actual overhead costs)
• Total credits: 8,600 + 3,500 = 12,100 (Overhead applied)

Step 2: Calculate Overapplied or Underapplied Overhead

The difference between the actual overhead and the applied overhead determines if the overhead is overapplied or underapplied.

• Overhead applied (credits) = 12,100
• Actual overhead (debits) = 6,900

Now, subtract the actual overhead from the applied overhead: $12,100 - 6,900 = 5,200 \text{ (Overapplied)}$

Conclusion:

The overhead is $5,200 overapplied. However, this specific answer is not an option in the choices given. Since the available options include $3,500 overapplied, it is possible that some data from the T-accounts was misinterpreted or omitted. You may want to recheck any other transactions or assumptions in the accounts.