Q.9: Disposition of underallocated or overallocated overhead-Advanced. (Z. lqbal, adapted) Naf Radiator Company uses a normal-costing system with a single MOH cost pool and MH as the cost-allocation base. The following data are for 2022:

Budgeted manufacturing overhead (MOH)	$ 4,800,000
Overhead allocation base	Machine-hours (MH)
Budgeted machine-hours (MH)	80,000
Manufacturing overhead (MOH) incurred	$ 4,900,000
Actual machine-hours (MH)	75,000

Machine-hours data and the ending balance (before proration of under- or overallocated overhead) are as follows:

Actual Machine-Hours (MH) 2022 End-of-Year Balance

Cost of Goods sold	60,000	$ 8,000,000
Finished Goods control	11,000	1,250,000
Work-in-process	4,000	750,000

Required:

1. Compute the budgeted manufacturing overhead rate for 2022
2. Compute the under-or overallocated manufacturing overhead of Nafa Radiator in 202 Dispose of this under-or overallocated amount using:

1. Write-off to Cost of Goods sold
2. Proration based on ending balance (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold.
3. Proration based on allocated overhead amount (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold.

3. Which method do you prefer in requirement 2? Explain.