Swifty Corporation 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	$3400000
Actual annual overhead cost	$3370000
Estimated machine hours	400000
Actual machine hours	395000

$3370000 applied and neither under- nor overapplied

$3357500 applied and $12500 overapplied

$3357500 applied and $12500 underapplied

$3400000 applied and $12500 overapplied