Company prints custom training material for corporations. The business was started January 1, 2014. 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 information is available for 2014.

Data Table

Budgeted direct labor costs	$225,000
Budgeted overhead costs	$315,000
Costs of actual material used	$148,500
Actual direct labor costs	$213,500
Actual overhead costs	$302,100

	Direct materials	Direct labor
Job 11	$4,870	$5,100
Job 12	$5,910	$6,800

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 of goods sold if the under- or overallocated overhead amount is as follows:
	a.	Written off to cost of goods sold
	b.	Prorated using the overhead allocated in 20142014 (before proration) in the ending balances of cost of goods sold and work-in-process control accounts
5.	Which of the methods in requirement 4 would you choose? Explain.