Surfcurl Ltd produces a line of non-motorised boats. Surfcurl uses a normal-costing system and allocates production overhead using direct production labour cost. The following data are for 2019:

Budgeted production overhead cost $125,000

Budgeted direct production labour cost $250,000

Actual production overhead cost $117,000

Actual direct production labour cost $228,000

Inventory balances on 31 December 2019 were as follows:

Account Ending balance 2018 direct production labour cost in ending balance

Work in process $50,700 $20,520

Finished goods 245,050 59,280

Cost of goods sold 549,250 148,200

Required

a) Calculate the production overhead allocation rate.

( b) Calculate the amount of under- or over-allocated production overhead.

c) Calculate the ending balances in Work In Process, Finished Goods and Cost Of Goods Sold if under- or over-allocated production overhead is as follows:

i. Written off to Cost of Goods Sold.

ii. Prorated based on ending balances (before proration) in each of the three accounts. (

iii. Prorated based on the overhead allocated in 2019 in the ending balances (before proration) in each of the three accounts.

iv. Which method would you choose? Justify your answer.

Please provide me step by step