Luzadis Company makes furniture using the latest automated technology. The company uses a joborder costing system and applies manufacturing overhead cost to products on the basis of machinehours. The predetermined overhead rate was based on a cost formula that estimates $1,040,000 of total manufacturing overhead for an estimated activity level of 80,000 machine-hours. During the year, a large quantity offurniture on the market resulted in cutting back production and a buildup offurniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year: Machinehours 71,860 Manufacturing overhead cost $ 998,869 Inventories at yearend: Raw materials $ 11,869 l.~.|ork in process (includes overhead applied of 573,340) $ 156,866 Finished goods (includes overhead applied of $147,630) $ 312,869 Cost of goods sold (includes overhead applied of $?61,480) $ 1,482,066 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 appropriatejournal 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 queslion by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 How much higher or lower will net operating inoome 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? 4: Required 3