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 $ $20,000$

Work in process $($includes overhead applied of $$100,440)$ $ $176,400$

Finished goods $($includes overhead applied of $$223,200)$ $ $392,000$

Cost of goods sold $($includes overhead applied of $ $792,360)$

$62,000$

$$887,000$

$$$20,000$$$$176,400$

$$392,000$

$$1,391,600$

Required:

Compute the predetermined overhead rate used by the company during the year.

Is Manufacturing Overhead underapplied or overapplied for the year?

Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account.