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: 62.000 $1,300,000 Machine-hours Manufacturing overhead coat Inventories at year-endt Raw materiala Work in proces (includen overhead applied of $100,400) Elshed goods ineludes overhead applied of $223,200) Cont of goods sold (includes overhead applied of $792,360) 20,000 $ 176, 400 5392,000 5.1.391,600 Required: 1. Compute the underapplied or overopplied 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 underapplied or overapplied overhead. Required 2 > Required Required 2 Required 3 Required Assume that the company clases any underapplied or overapplied overhead to cost of Goods Sold. Prepare the appropriate journal entry (If no entry is required for a transaction/evend select "No Journal entry required in the first account field.) Vlow transaction list Journal entry worksheet 1 Record the entry to close the balance in the manufacturing overhead account to the cost of goods sold account, Note enter dobit before credits Gondral Journal Dobit Credit Event 1 Racord entry Clonary View general Journal Rocure 1 Required 3 3 Required 1 Required 2 Required 3 Required 4 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.) View transaction list Book Journal entry worksheet Print TEE Du Next Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 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? if the Net Operating income will be overhead oled other than closed articly to cost of good old
