ollowing information has been extracted from the books of Ali & Usman Co. to make adjustment of Under or Over applied factory overhead cost in Cost of Goods Sold Statement at normal.

Extracted information of the company as follows:

Particulars	Rs.
Direct material cost	100,000
Direct labor cost	40,000
Actual factory overhead cost	50,000
*Cost of good to sold at normal	290,000

Applied factory overhead rate is 150% of direct labor cost.

*The cost of goods sold in which factory overhead cost is included on the basis of predetermined rate is termed as Cost of Goods Sold at Normal.

Required:

(1) Compute Under or Over applied Factory Overhead (FOH) Cost with the help of given information.

(2) Compute cost of goods sold at actual after making adjustment of Under or Over applied Factory Overhead (FOH) to Cost of good to sold at normal.

(3) How the net income of Ali & Usman Company will be affected (increased or decreased) if Under/Over applied FOH cost is not adjusted appropriately in cost of goods sold statement.