KnowItAll prints custom training material for corporations. The business was started January 1,2017 The company uses a normal-costing system. It has twodirect-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 2017.

Budgeted direct labor costs $225,000

Budgeted overhead costs

$270,000

Costs of actual material used

$163,000

Actual direct labor costs

$216,500

Actual overhead costs $261,800

There were two jobs in process on December 31,2017: Job 11 and Job 12. Costs added to each job as of December 31 are as follows:

Direct materials

Direct labor

job 11

$4,630

$5,300

Job 12

$5,180

$7,500

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 20172017 (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.