Prorate Overhead Variances: Fermi Processing Corporation has a special-order coating process that operates in two departments: surface preparation and application. Jobs enter the surface preparation department where chemical treatments clean the surface and prepare it chemically for the application of coatings. The coating takes place in the application department under carefully controlled conditions. The following cost and activity amounts were prepared for this year:

During the year, work was performed on a number of jobs. Overhead in the surface preparation department was applied on the basis of $11,875 per machinehour, while overhead in the application department was applied at the rate of 44.59 percent of direct materials costs. At the end of the year, the following balances appeared in the inventory accounts and Cost of Goods Sold account:

The overhead applied and prorated in the Cost of Goods Sold account represents the applied overhead plus a debit or credit for any under- or overapplied overhead for the period. That is, all of the overhead variance has been charged or credited to Cost of Goods Sold Required: Determine the entry that would be required to prorate the over- or underapplied overhead for surface preparation and application. (Round amounts to the nearest dollar.)

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Overhead costs Direct materials Direct labor Machine-hours Surface Preparation Application $190,000 $350,032 24,000 785,000 58,900 56,000 16,000 40,000