Southwick Company uses normal costing in its job-costing system. Partially completed T-accounts and additional information for Southwick for 2017 are as follows:

*

Direct manufacturing labour wage rate was $12 per hour.
b.	Manufacturing overhead was allocated at $16 per direct manufacturing labour-hour.

During the year, sales revenues were

$1,040,000,

and marketing and distribution costs were

$124,000.

1.	What was the cost of goods sold before proration of under- or overallocated overhead?
2.	What was the under- or overallocated manufacturing overhead in 2017?
3.	Dispose of the under- or overallocated manufacturing overhead using the following:
	a. Write-off to Cost of Goods Sold
	b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold
4.	Using each of the approaches in requirement 7, calculate Southwick's operating income for 2017.
5.	Which approach in requirement 7 do you recommend Southwick use? Explain your answer briefly.

Direct Materials Control Work-in-Process Control Finished Goods Control 1-1-2017 38,000 233,000 1-1-2017 43,000 1-1-2017 11,000 667,800 134,000 923,920 Dir. Manuf. labour 354,000 Manufacturing Overhead Allocated Cost of Goods Sold Manufacturing Overhead Control 509,000