Answer:
$1,666,000 applied and $9,000 under-applied.
Explanation:
Given that,
Estimated annual overhead cost = $1,700,000
Actual annual overhead cost = $1,675,000
Estimated machine hours = 500,000
Actual machine hours = 490,000
Predetermined Overhead Rate:
= Estimated annual overhead cost ÷ Estimated machine hours
= $1,700,000 ÷ 500,000
= $3.40 per machine hour
Overhead Applied:
= Actual machine hours × Predetermined Overhead Rate
= 490,000 × $3.40
= $1,666,000
Under-applied Overhead:
= Actual annual overhead cost - Overhead Applied
= $1,675,000 - $1,666,000
= $9,000
