Question $7$

$5$ pts

Chippewa Industries uses uses a predetermined overhead rate to apply overhead to products using machine hours as the cost driver. At the beginning of the year, estimated overhead cost was $$374,000$ and $68,000$ of machine hours were estimated to be worked. If $70,000$ machine hours were actually worked during the year and actual overhead cost was $$370,000,$ what is the amount of underapplied or overapplied overhead?

$$4,000$ underapplied

$$15,000$ overrapplied

$$4,000$ overapplied

$$15,000$ underapplied