Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing 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 $814,000 of total manufacturing overhead for an estimated activity level of 74.000 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 company's warehouse. The company's cost records revealed the following actual cost and operating data for the year Machine-hours Marafacturing overhead cont Inventories at year-end A ter Work in proces includes overhead applied ct 59.600) Tinted good noludes overhead applied or 12,200) Cost of good 2018 Ancades overhead applied of 505.2001 60.000 792.000 $ 17.000 115.200 326,400 1,479.400 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 journal entry 4 How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in Process, Fished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold