Question 1 Sandar Company is highly automated and uses computers to control manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year: Computer-hours 90,000 Fixed manufacturing overhead cost $1,278,000 Variable manufacturing overhead per computer-hour $5.30 During the year, a severe economic recession resulted in cutting back production and a buildup of inventory in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year ended 31 December 2019: 85,000 $7.890.000 $1,722.000 Computer-hours Purchase of raw materials Direct labor cost Manufacturing overhead costs: Insurance, factory ...... Depreciation of equipment .. Indirect material.... Indirect labor.. ....... Property taxes ......... Maintenance............ Rent, building ......... $ 88,000 170,000 12,000 327,000 85,000 630,000 360,000 ........ ........... Raw Materials Work in Process Finished Goods Beginning $1,770,000 960,000 1.110,000 Ending $900,000 870,000 1,860,000 Required: a. Compute the company's predetermined overhead rate for the year. b. Compute the underapplied or overapplied overhead for the year. c. Prepare a schedule of cost of goods manufactured. d. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold. e. Prepare an income statement for the year ended 31 December 2019. Additional information of the Company is given below: Sales... $18,100,000 Selling expenses.................... $1,070,000 Administrative expense....... 720,000