Problem 3-12 Predetermined Overhead Rate; Disposing of Underapplied or Overapplied Overhead [LO3-4] 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 $1,615,000 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 companys warehouse. The companys cost records revealed the following actual cost and operating data for the year:

Assignment 2-3 Week 2 Problems Help Save & Exit Sbmit Check my work 2 Problem 3-12 Predetermined Overhead Rate; Disposing of Underapplied or Overapplied Overhead [LO3 4) 10 points 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 $1,615,000 of total manufacturing overhead for an estimated activity level of 85,000 machine-hours. eBook 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: Print References Machine-hours Manufacturing overhead cost Inventories at year-end: 77,000 1,574,000 Raw materials work in process [includes overhead applied of $73,150) Pinished goods (includes overhead applied of $277,970) 14,000 $ 94,000 $ 357,200 1,428,800 Cost of goods sold (includes overhead applied of $1,111, 880) Required 1. Compute the underapplied or overapplied overhead