125)Waterway Industries applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:

Estimated annual overhead cost	$1500000
Actual annual overhead cost	$1475000
Estimated machine hours	400000
Actual machine hours	390000

$1500000 applied and $12500 overapplied

$1475000 applied and neither under-nor overapplied

$1462500 applied and $12500 overapplied

$1462500 applied and $12500 underapplied