Applied Overhead; Over- or Underapplied Amount. Normal annual capacity for Daswan 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 over¬ head of $7,800. LO6 Required: Compute (1) the applied factory overhead and (2) the over- or underapplied amount for October.