The following information has been taken from the accounting records of Nano Inc. for the year 2016.

Beginning direct materials inventory $50,000

Purchases of direct raw materials $650,000

Ending direct material inventory $30,000

Direct labor $725,000

Total direct number of labor hours worked during the year 2016 were 50,000 hours.

Beginning work in process inventory $100,000

Ending work in process inventory $120,000

Beginning finished goods inventory $50,000

Ending finished goods inventory $60,000

Company is using pre-determined (applied) overhead applied rate of $5 per direct labor hour for allocation of factory overhead cost.

Required:

Calculated the following from above data

1. Prepare the Cost of Goods Sold Statement for the year from the data given above using FOH applied rate.
2. Calculate the over / under FOH applied, when in mid Jan. 2017 the actual FOH were calculated of year 2016 were $295,000.
3. What was the impact on net income of above over/under applied FOH, which is calculated using pre-determined overhead rate?