Chapter 03 Homework Help Save& Exit Submit 3 Problem 3-12 Predetermined Overhead Rate; Disposing of Underapplied or Overapplied Overhead [Lo3- 4 66.68 poits Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of formula that estimates $680,000 of total manufacturing overhead for an estimated activity level of 85.000 machine-hours The p overhead rate was based on a cost During the year, a large quantity of furniture on the market resulted in cutting back production and a buidup of company's warehouse. The company's cost records revealed the following actual cost and operating data for the year furniture in the ine-hours Manufacturing overhead cost 637,000 Work in process (includes overhead applied of $36,480) Finished goods (includes overhead applied of $91,200) Cost of goods sold (includes overhead applied of $480, 320) 20,000 s 115, 800 289,500 1,524,700 Required 1. Compute the underapplied or overapplied overhead. 2. Assume that the company closes any entry. (If no entry is required for Sold. Prepare the appropriste joumal underapplied or overapplied overhead to Cost cf "No journal e r a transaction/event, select "No journal entry required" in the irst account field.) Assume that the company allocates any underapplied or over appliedoverhead p and Cost of Goods Sold. Prepare the appropriate journal entry. (If no entry is required for a t entry required" in the first account field.) 4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is alocated to Work in Process Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold? to Work in Process, Finished Goods ansaction/event, select "No journal Next Prev3 of 3