1. Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold. Because the company used a predetermined overhead rate based on Direct Labor Hours with the following relevant information:

   Budgeted Manufacturing Overhead	$500,000
   Actual Manufacturing Overhead	$400,000
   Budgeted Direct Labor Hours	20,000 hours
   Actual Direct Labor Hours	21,000 hours

2. Ending balances in the relevant accounts were:

   Raw Materials	$26,432
   Work-in-Process	40,000
   Finished Goods	80,000
   Cost of Goods Sold	680,000

3. • Prepare the entry to record the actual manufacturing overhead that was incurred (50% was depreciation and 50% utilities payable).
   • Record the entry to allocate the overhead to the jobs.
   • How much is the overhead under-allocated or over-allocated?
   • Prepare the entry to close out the over or under allocated at the end of the period if it is not prorated.
   • Prepare the entry at the end of the period if it is prorated.
   • Would you recommend that closing out the overhead should follow d or e. Explain your answer. Without an explanation, you will lose three points automatically.