1+ Capital Manufacturing had the following financial information for the year ended December 31 2021: Inventory Balances: Work in Progress Finished Goods Raw Materials Beginning $ 80,000 Ending $ 50,000 $ 67,000 $ 75,000 $ 20,000 $ 20,000 During the year, the budgeted and actual costs were as follows: < < Note Budget Actual Raw Materials Labour 1 200,000 2 < 440,000 See note1 < < 418,000 Depreciation Factory Equipment 72,000 70,000 Depreciation Office Equipment < 26,000 24,000 Building Rent 3 100,000 100,000 < < Maintenance-Factory Equipment < 64,000 40,000 < < Utilities - Electrical < 40 200,000 Sales Commissions 180,000 < 50,000 40,000 Advertising 35,500 25,000 5 20,000 17,000 777 Budget Actual 20,000 17,000 33,000 30,000 Shipping < Other information < Direct Labour Hours Machining Hours Sales for the year were $1,700,000+ e Note 1 - Raw material < Budget: 80% of raw materials will likely be traced directly to specific jobs, and the remaining 20% of raw materials will likely related to production but are untraceable to specific jobs < < Actual: during the year $20,000 worth of materials were untraceable and applied to overhead, and the rest were directly traced and applied to WIP. < During the year $200,000 of raw materials were purchased Note 2 Labour - Budget: Direct Labour of $200,000+ Factory Salaries of $80,000 + Sales and Marketing Salaries of $160,000 = $440,000 < Actual: Direct Labour of $170,000+ Factory Salaries of $85,000 + Sales and Marketing Salaries of $163,000 $418,000 Note 3 - Building Rent The building is only used for the manufacturing facility Note 4 - Utilities Electrical < For both budget and actual costs, 80% of these costs are related to the factory, and 20% of these costs are related to the administrative office. < < Note 5 - Shipping Budget: 10% of budgeted shipping costs were for the delivery of raw materials to the manufacturing facility, and the remaining 90% of the shipping costs are for the delivery of finished goods to customers. < < Actual: All of the shipping costs were for the delivery of finished goods to customer. < Note 6 - Overhead The manufacturer uses Normal Costing. Overhead is allocated based on Direct Labour costs. < < The company is unsure how to treat under/over applied overhead. < Required: < Show T-accounts for the Inventory Accounts (Raw Materials, WIP, Finished Goods) and for Manufacturing Overhead. < Prepare an income statement. You may include a schedule of Cost of Goods Manufactured and Cost of Goods Sold as part of the Income Statement or as separate schedules. < Explain which options the company can use to allocate any under/over applied overhead. Identify which option you have chosen and why it was chosen