Machine-hours RAY materials 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 $765,000 of total manufacturing overhead for an estimated activity level of 85,000 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 data for the year 69,000 Manufacturing overhead cost $ 719,000 Inventories at year-endi Work in process includes overhead applied of 5623100) Tinished goods (includes overhead applied of $105,570) 5311.100 Cost of goods sold includes overhead applied of 5453.3303 $ 1,335,900 Required: 1. Compute the underapplied or overapplied overhead. 2. Assume that the company closes any underapplied or overapplled 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 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? $14.000 183,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required Compute the underapplied or overapplied overhead. Required 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 accounted) View transaction that Journal entry worksheet Record the entry to close the balance in the manufacturing overhead account to the cost of goods sold account Note Erter dette before credits Event General Journal Debit Credit Record entry Clear entry View general journal Road 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 lit Journal entry worksheet Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 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? Net operating income will be overhead is allocated rather than closed entirely to cost of goods sold
