Luzadls Company makes fumlture using the latest automated technology. The company uses a Job-order costlng system and applies manufacturing overhead cost to products based on machine-hours. The predetermined overhead rate was based on a cost formula that estimates $560,000 of total manufacturing overhead for an estimated activity level of 70,000 machine-hours. During the year, a large quantity of furniture on the market caused Luzadis to cut production and bulld Inventorles. The company provided the following data for the year. Required: 1. Compute the underapplied or overapplied overhead. 2 Assume the company closes underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate Journal entry. 3. Assume the company allocates underapplied or overapplled overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the approprlate Joumal 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 belng closed to Cost of Goods Sold? Complete this question by entering your answers in the tabs below. Compute the underepplied or overapplied overheed. Assume the company doses underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. Note: If no entry is required for a transaction/event, select "No joumal entry required" in the first account field. Journal entry worksheet Record the entry to close the balance in the manufacturing overhead account to the cost of goods sold account. Note: Enter cebis betare crec 2x. Assume the company allocates underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate joumal entry. Note: If no entry is required for a transaction/event, select "No joumal entry required" in the first accourit field. Journal entry worksheet Record the allocation of the underapplied/overapplied overhead to various accounts. Requifeed 1 84 Net operating income will be overhad is allocated rather than closed entiey to cost of goods sold