Sunland Corporation is analyzing its account balances for $2022.$ As of the end of $2022,$ a debit balance of $$3700$ remains in the

Manufacturing Overhead account. What impact does this have on the financial statements, assuming the proration method is not

used?

It will reduce income by $$3700.$

It will increase assets by $$3700$ and have no effect on income.

It will decrease gross profit but have no effect on income.

It will increase income by $$3700.$