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 $1,152,000 of total manufacturing overhead for an estimated activity level of 72,000 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 datafor the year:

Machine-hours55,000

Manufacturing overhead cost$1,102,000

Inventories at year-end:Raw materials$18,000

Work in process (includes overhead applied of $52,800)$114,600

Finished goods (includes overhead applied of $167,200) $362,900

Cost of goods sold (includes overhead applied of $660,000)$1,432,500

Required:

3. Assume that the company allocates any underapplied or overappliedoverhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry.