Problem 3-12 Predetermined Overhead Rate; Disposing of Underapplied or Overapplied Overhead (LO3- 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 $814,000 of total manufacturing overhead for an estimated activity level of 74.000 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. 60.000 782,000 Machine-hours Manufacturing overhead cost Inventories at year-end: Rav saterials work in process (includes overhead applied of $39,bee) Finished goods (includes overhead applied of $112,280) Cost of goods sold (includes overhead applied of $50, 200) $ $ $ $ 17. 115,200 326,400 1.478, Required: 1. Compute the underappiled or overapplied overhead 2. Assume that the company closes any underapplied or overapped overhead to Cost of Goods Sold Prepare the appropriate journal entry 3. Assume that the company alocates 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 wil net operating income be if the underapplied or overoppled overhead is located to Work in Process Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the underapplied or overapplied overhead