Northwest Limited is a company that produces custom-made furniture groupings for museum, gallery, and corporate settings. The company uses job costing (normal) to accumulate costs. The company has two indirect cost pools: indirect costs for machining (base is machine hours used) and indirect costs for finishing (base is direct labor costs).

The company has budgeted $490,000 for indirect machining costs and $168,372 for indirect finishing costs. They also have budgeted direct labor costs to be 31,180 direct labor hours @ $22.50 per hour and 35,000 machine hours for the period.

Northwest worked on three jobs during the current period. Jobs 125 and 166 were carried forward from the prior period, with beginning balances of $24,000 and $53,000 respectively. Job 201 was begun in the current period.

Direct materials issued in the current period to Jobs 125, 166, and 201 were $195,000; $236,000; and $253,000. The jobs used 10,290; 9,408; and 9,702 direct labor hours respectively; the wage rate is $24.00 per hour for all production employees. The jobs used 9,000; 11,880; and 15,120 machine hours respectively.

Actual indirect machining costs were $513,500; actual indirect finishing costs were $152,500.

Job 201 was completed and sold during the current period; Job 125 was completed but not sold; Job 166 is incomplete at the end of the current period.

Required:

1. Calculate the MOH allocation rates for both indirect cost pools.
2. Prepare a detail schedule to show the ending balances in Work-In-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.
3. For each indirect cost pool, determine whether Northwest is under- or over-allocated.
4. Calculate the under- or over-allocation adjustments using proration based on the amount of machining and finishing MOH included in account balances.
5. Prepare the journal entries necessary at year-end to adjust the allocations and to close the MOH accounts.