ErgoFurn, Inc. manufactures ergonomically designed computer furniture. ErgoFurn uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs:

Job No.		Item		Units		Accumulated Cost
CC723		Computer caddy		20,000			$900,000
CH291		Chair		15,000			431,000
PS812		Printer stand		25,000			250,000
							$1,581,000

On November 30, ErgoFurns Raw Materials Inventory account totaled $668,000, and its Finished Goods Inventory totaled $3,456,400. ErgoFurn applies manufacturing overhead on the basis of machine hours. The companys manufacturing overhead budget for the year totaled $4,500,000, and the company planned to use 900,000 machine hours during the year. Through the first eleven months of the year, the company used a total of 830,000 machine hours, total factory overhead amounted to $4,274,500, and Cost of Goods Sold was $8,750,250. ErgoFurn purchased $638,000 in raw materials in December and incurred the following costs for jobs in process that month:

Job No.		Materials Issued		Machine Hours		Direct Labor Hours		Direct Labor Cost
CC723		$155,000		12,000		11,600		$122,400
CH291		$13,800		4,400		3,600		$43,200
PS812		$211,000		19,500		14,300		$200,500
DS444		$252,000		14,000		12,500		$138,000

The following jobs were completed in December and transferred to the Finished Goods Inventory:

Job No.		Item		Units
CC723		Computer caddy		20,000
CH291		Chair		15,000
DS444		Desk		5,000

Assume that ErgoFurn sold 15,000 computer caddies, 12,000 chairs, and 4,500 desks in December.

ErgoFurn incurred $395,000 in manufacturing overhead in December. Given that expenditure, was manufacturing overhead under- or overapplied for the year? By how much?

Assume that ErgoFurn closes under- or overapplied overhead to the Cost of Goods Sold account. Prepare the journal entry to close the manufacturing overhead account.

Account Titles and Explaination	Debit	Credit
Cost of Goods Sold
Manufacturing Overhead

Assume that ErgoFurn prorates under- or overapplied overhead to the appropriate accounts. Calculate the allocated amounts and adjust the account balances as needed. (Round answers to the nearest dollar amount, e.g. 5,275 and percentage of total to 1 decimal place, e.g. 52.8%.)

	Allocation	Adjusted Balance
Work in Process
Finished Goods
Cost of Goods Sold