Nedfig, if you smith under someone else's FFL you don't need one of your own. Working at a gunshop, etc. If you want to go into business for yourself you will need a Class 01 -- Dealer in Firearms Other Than Destructive Devices. The cost for the license is $200 and it's good for 3 years. After that it's $90 per year to renew it.
I'm not familiar with the Class II. The 01 doesn't allow you to deal with machine guns, sawed off shotguns, etc. The Class III covers these. I'm not sure but I think the cost for the Class III is $1000 a year. For any FFL license you have to contact the BATF office in your area and ask for an application. You fill out 2 copies, get fingerprinted and photographed. One copy of everything goes to the BATF along with your $200 and one goes to the local CLEO (Chief Law Enforcement Officer)in your area. That can be the Chief of Police in your city or the county Sheriff. Then it's a 30 to 60 day wait before you receive your license. Shortly after getting it you will be contacted by the BATF and an Compliance Inspector will set up an appointment to come by and go over the regulations, forms etc with you. George