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 $1,068,000 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours During the year, a large quantity of furniture on the maiket 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 Required: 1. Compute the underapplied or overapplied oyerhead. 2. Assume that the company closes any underapplied or overappied overhead to Cost of Goods Sold. Prepare the appropriate journat 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 overappled overhead is allocated to Work in Process. Finished Goods, and Cost of Goods Soid rather than being closed to Cost of Goods Sold