4-35 Proration of overhead. The Row-On-Watershed Company (ROW) produces a line of non-motorized boats. ROW uses a normal-costing system and allocates manufacturing overhead using direct manufactur- ing labor cost. The following data are for 2020: Budgeted manufacturing overhead cost Budgeted direct manufacturing labor cost Actual manufacturing overhead cost Actual direct manufacturing labor cost $110,000 $220,000 $117,000 $230,000 ASSIGNMENT MATERIAL 161 Inventory balances on December 31, 2020, were as follows: 2020 direct manufacturing Account Ending balance labor cost in ending balance Work in process $41,500 $ 23,000 Finished goods 232,400 66,700 Cost of goods sold 556,100 140,300 1. Calculate the manufacturing overhead allocation rate. 2 Compute the amount of under- or overallocated manufacturing overhead. 3. Calculate the ending balances in work in process, finished goods, and cost of goods sold if under- or overallocated manufacturing overhead is as follows: a. Written off to cost of goods sold b. Prorated based on ending balances (before proration) in each of the three accounts c. Prorated based on the overhead allocated in 2020 in the ending balances (before proration) in each of the three accounts 4. Which method would you choose? Justify your answer. Required