MacGiver Brass is a brass plating firm with sales of $8 million and profits before taxes of $625,000. MacGiver has a loan outstanding at its local bank for working capital purposes. As the loan officer reviewing MacGivers loan application, you are charged with making a recommendation as to whether the $608,000 loan should be renewed for another year. Upon reviewing MacGivers most recent annual report, you find the following footnote: Underabsorbed overhead of $462,000 was prorated to inventories (2/3) and cost of goods sold (1/3). a. How should you evaluate MacGivers annual report in light of this footnote? In particular, how does this footnote affect your recommendation regarding the loan? b. In preparing for your meeting with MacGivers president and chief financial officer, what questions do you want to ask regarding this footnote?