Finlon Upholstery, Inc., uses a job-order costing system to accumulate manufacturing costs. The companys work-in-process on December 31, 20x1, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no finished-goods inventory on this date. Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the companys practical capacity, in terms of direct-labor hours, multiplied by the budgeted direct-labor rate.) Budgeted totals for 20x2 for direct labor and manufacturing overhead are $4,200,000 and $5,460,000, respectively. Actual results for the year follow.

Direct material used	$	5,550,000
Direct labor		4,350,000
Indirect material used		64,000
Indirect labor		2,860,000
Factory depreciation		1,740,000
Factory insurance		59,000
Factory utilities		832,000
Selling and administrative expenses		2,160,000
Total	$	17,615,000

Job no. 2077 was completed in January 20x2; there was no work in process at year-end. All jobs produced during 20x2 were sold with the exception of job no. 2143, which contained direct-material costs of $155,000 and direct-labor charges of $85,000. The company charges any under- or overapplied overhead to Cost of Goods Sold.

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[The following information applies to the questions displayed below.] Finlon Upholstery, Inc., uses a job-order costing system to accumulate manufacturing costs. The companys work-in-process on December 31, 20x1, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no finished-goods inventory on this date. Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the companys practical capacity, in terms of direct-labor hours, multiplied by the budgeted direct-labor rate.) Budgeted totals for 20x2 for direct labor and manufacturing overhead are $4,200,000 and $5,460,000, respectively. Actual results for the year follow.

Direct material used	$	5,550,000
Direct labor		4,350,000
Indirect material used		64,000
Indirect labor		2,860,000
Factory depreciation		1,740,000
Factory insurance		59,000
Factory utilities		832,000
Selling and administrative expenses		2,160,000
Total	$	17,615,000

Job no. 2077 was completed in January 20x2; there was no work in process at year-end. All jobs produced during 20x2 were sold with the exception of job no. 2143, which contained direct-material costs of $155,000 and direct-labor charges of $85,000. The company charges any under- or overapplied overhead to Cost of Goods Sold.

5-a. Compute the amount of under- or overapplied overhead at year-end. 5-b. Prepare the necessary journal entry to record its disposition.