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 $1,332,000 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 Manufacturing overhead cost. Inventories at year-end Raw materials Work in process (includes overhead applied of $100,440) Finished goods (includes overhead applied of $223,200) Cost of goods sold (includes overhead applied of $792,360) 62,000 $1,300,000 20,000 176,400 392,000 51,391,600 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, 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 Required 2 Required 3 Required 4 Compute the uncerapplied or overapplied overhead. Required 2 > Required 1 Required 2 Required 3 Required 4 Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry to close the balance in the manufacturing overhead account to the cost of goods sold account. Note Enter debits before credits Event 1 General Joumal Debit Credit Racord entry Clear antry View general journal Required 1 Required 3> 3 Required 11 Required 21 Required 3 Required 4 nts 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) eBook View transaction list Print Journal entry worksheet eferences Record the allocation of the underapplied/overapplied overhead to various accounts. Note: Enter debits before credits Event General Journal Debit Credit Record untry Claar entry View general journal Required 2 Required 4 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Drai Next > 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? Net operating income will be overhead is allocated cather than closed entirety to cost of goods sold Required 3