Luzache Company makes furniture using the latest automated technology. The company uses a job-order cooting system and applies manufacturing overhead cost to products on the basis of machine hours. The predetermined overhead rate was based on a cost formula that estimates $785,000 of total manufacturing overhead for an estimated activity level of 85,000 machine hours During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the comparty's warehouse. The company's cost records revealed the following actual cost and operating data for the year. Machine-hours Manufacturing overhead cost Inventories at year and Raw wtortals Work in process (includes overhead applied of $62, 16) Finished goods (includes overhead applied of $185,579) Cost of goods sold (includes overhead applied of $493,338) 69,800 $ 719,000 14,608 183,686 $ 311, 100 $ 1,335,90 Required: 1 Compute the underapplied or overapplied overhead. 2 Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or overapplied overhead proportionally to Work In Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate fournal entry. 4. How much higher or lower will net operating Income be if the underapplied or overapplied overhead is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the underapplied or overapplied overhead. Underapplied overhead cost Finquired 2 >