CompuFurn, Incorporated, manufactures furniture for computer work stations. CompuFurn uses a job-order costing system and employs absorption costing. CompuFurns work-in-process inventory on November 30 consisted of the following jobs.

Job Number	Description	Units	Accumulated Cost
CC723	Computer caddy	20,000	$ 900,000
CH291	Chair	15,000	416,000
PS812	Printer stand	25,000	250,000
Total			$ 1,566,000

On November 30, the companys finished-goods inventory, which is evaluated using the first-in, first-out (FIFO) method, consisted of four items.

Item	Quantity and Unit Cost	Accumulated Cost
Computer caddy	7,500 units @ $64 each	$ 480,000
Chair	19,400 units @ $35 each	679,000
Printer stand	21,000 units @ $55 each	1,155,000
Desk	11,200 units @ $102 each	1,142,400
Total		$ 3,456,400

At the end of November, the balance in CompuFurns Materials Inventory account, which includes both raw materials and purchased parts, was $668,000. Additions to and requisitions from the materials inventory during the month of December included the following.

Additions	Raw Materials	Purchased Parts
Purchases	$ 242,000	$ 396,000
Requisitions:
Job CC723	51,000	104,000
Job CH291	3,000	10,800
Job PS812	124,000	88,000
Job DS444 (5,000 desks)	65,000	187,000

CompuFurn applies manufacturing overhead on the basis of machine hours. The companys manufacturing overhead budget for the year totaled $4,500,000. The company planned to use 900,000 machine hours during this period, which is the firms estimated practical capacity. Through the first 11 months of the year, a total of 830,000 machine hours were used, and actual manufacturing overhead amounted to $4,139,000.

During the month of December, machine hours and labor hours consisted of the following:

Account	Machine Hours	Labor Hours	Labor Cost
CC723	12,000	11,600	$ 122,400
CH291	4,400	3,600	43,200
PS812	19,500	14,300	200,600
DS444	14,000	12,500	138,000
Indirect labor	0	3,000	29,400
Supervision	0	0	57,600
Total	49,900	45,000	$ 591,200

The jobs completed in December and the unit sales for that month are as follows:

Job Number	Production Items	Quantity Completed	Item	Quantity Shipped
CC723	Computer caddy	20,000	Computer caddy	17,500
CH291	Chair	15,000	Chair	21,000
DS444	Desks	5,000	Printer stand	18,000
			Desk	6,000

1. Calculate the dollar balance in CompuFurns Work-in-Process Inventory account as of December 31.
2. Calculate the cost of the chairs in CompuFurns Finished-Goods Inventory as of December 31.
3. Actual manufacturing overhead incurred in December amounted to $252,000. Calculate CompuFurns overapplied or underapplied overhead for the year.
4. Explain two alternative accounting treatments for overapplied or underapplied overhead balances when using a job-order costing system.