Normal annual capacity for Smythe Company is 36,000 machine hours, with fixed factory overhead budgeted as $16,920 and an estimated variable factory overhead rate of $2.10 per hour. During October, actual production required 2,700 machine hours, with a total factory overhead of $7,400.
Required:
Compute
(1) The applied factory overhead and
(2) The over- or under applied amount for October.