5 o L Luzadis-Co'm'pany_makes furniture using the latest automated technology. The company uses a job-order costing system and applies, - manufacturing overhead cost to products based on machine-hours. The predetermined overhead rate was based on a cost formula that estimates $680,000 of total manufacturing overhead for an estimated ac'u'vity level of 85.000_machine-h9urs. s During the year, a large quantity of furniture o|:1 the market caused Luzadis to cut production and build inventories. The company -provided the following data for the year: i 4 5 i Machine-hours d 5 i 76,000 g Manufacturing overhead cost $ 637,000 Inventories at year-end: ~ Raw materials $ 20,000 Work in process (includes overhead applied of $36,480) $ 115,800 s Finished goods (includes overhead applied of $91,200) $ 289,500 : Cost of goods sold (includes overhead applied of $480,320) $ 1,524,700 ' I Required: * 1. Compute the underapplied or overapplied overhead. S 2. Assume the company closes underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume the company allocates underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplied overhea d is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold? N & . Complete this question by entering your answers in the tabs below. T | Required ZWI Required 3 \" Required 4