Calico prints custom training material for corporations. The business was started January 1, 2017. The company uses a normal costing system. It has two direct cost pools, materials and labor, and one indirect cost pool, overhead. Overhead is charged to printing jobs on the basis of direct labor cost. The following shows the information available for 2017.

Budgeted direct labor costs $180,000 Budgeted overhead costs $324,000 Costs of actual material used $155,000 Actual direct labor costs $171,000 Actual overhead costs $308,500

There were two jobs in process on December 31, 2017: Job 11 and Job 12. Costs added to each job as of December 31 are as follows:

Direct materials Direct Labor Job 11 $4,900 $4,800 Job 12 $5,630 $6,600

1. Compute the overhead allocation rate. 2. Calculate the balance in ending work in process and cost of goods sold before any adjustments for under or overallocated overhead. 3. Calculate under or overallocated overhead 4. Calculate the ending balances in work in process and cost if goods sold if the under or overallocated amount is as follows: a. Written off to cost if goods sold. b. Prorated using the overhead allocated in 2017 (before proration) in the ending balances if cost of goods sold and work in process control accounts. 5. Which of the methods in requirement 4 would you choose? Explain