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 machine-hours. The predetermined overhead rate was based on a cost formula that estimates $680,000 of total manufacturing overhead for an estimated activity level of 85,000 machinehours. 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 T6,B00 Manufacturing overhead cost 5 53?,000 Inventories at yearend: Raw materials 5 20,000 Iwork in process (includes overhead applied 01' $36,430) 5 115,300 Finished goods (includes overhead applied of $91,280) 5 289,500 Cost of goods sold (includes overhead applied of $480,320) $ 1,524,?00 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 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 ifthe 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 labs below. Required 1 Required 2 Required 3 Required 4 Compute the underapplied or overapplied overhead. nderapplied overhead cost _ Required 2 > Required 1 Required 2 Required 3 Required 4 Assume that the company closes any underapplied or overapplied overhead to 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 Journal entry worksheet Record the entry to close the balance in the manufacturing overhead account to the cost of goods sold account. Note: Enter debits before credits. Event General Journal Debit Credit a. Record entry Clear entry View general journalRequired 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 Journal entry worksheet > Record the allocation of the underapplied/overapplied overhead to various accounts. Note: Enter debits before credits. Event General Journal Debit Credit a. Record entry Clear entry View general journal