For March XYZ estimated MOH at $300,000 and had actual MOH of $330,000. They estimated DLH (the base they use to calculated the predetermined overhead rate) to be 50,000 hours, and actually had 45,000 hours.

a.If ABC close any over or under-applied MOH all to COGS, what will be the effect on Net Income of the adjustment required for March?

b.If ABC instead close any over or under-applied MOH to WIP, FG and COGS how would the effect on Net Income differ, if at all? (No calculations are needed for part b)