Targon, Inc. manufactures lawn equipment. A job order system is used because the products are manufactured according to the specific requirements of each customer. Targon employs a full absorption accounting method for cost accumulation. The balances in selected general ledger accounts for the eleven month period ended August 31,2009 , are presented below:

{Required:}
(a)
1. Calculate the over- or underapplied overhead for the year ended September 30, 2010. Be sure to indicate whether the overhead is over- or underapplied.
2. What is the appropriate accounting treatment for this over- or underapplied overhead balance? Explain your answer.

(b) Calculate the dollar balance in the work in process inventory account as of September 30, 2010.

(c) Calculate the dollar balance in the finished goods inventory as of September 30, 2010, for the estate sprinklers using a FIFO basis.

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Stores inventory Work in process inventory 32,000 1,200,000 Finished goods inventory. 2,785,000 Factory overhead control 2,260,000 Cost of goods sold 14,200,000 The work in process inventory consists of two jobs: Job Accumulated No. Units Items Cost 3005-5 50,000 Estate sprinklers $ 700,000 3006-4 40,000 Economy sprinklers 500,000 $1,200,000 The finished goods inventory consists of five items: Items Estate sprinklers Deluxe sprinklers Brass nozzles Rainmaker nozzles Connectors Quantity and Unit Cost 5,000 units @$22 each 115,000 units @ $17 each 10,000 gross @ $14 per gross 5,000 gross @ $16 per gross 100,000 gross @ $5 per gross Accumulated Cost $ 110,000 1,955,000 140,000 80,000 500,000 $2,785,000 'The factory cost budget prepared for the 2009-10 fiscal year is presented below. The company applies factory overhead on the basis of direct labor hours. The activities during the first eleven months of the year were quite close to the budget. A total of 367,000 direct labor hours have been worked through August 31, 2010.