The Futons for You Company sells batches of custom$-$made futons to customers and uses predetermined rates for fixed overhead, based on machine hours.

The following data are available for last year:

Budgeted and actual fixed factory overhead cost................... $$160,000$

Budgeted machine hours................................................. $100,000$

Actual machine hours used...............................................$\mathrm{.}110,000$

$..............................................................$Machine Hours Used

Job $20.............................................\mathrm{.}11,000$

Job $21.............................................\mathrm{.}16,000$

Job $22.............................................\mathrm{.}14,000$

Job $23...............................................\mathrm{.}9,000$

REQUIRED

A$.$ Compute the estimated overhead allocation rate to be used for the year.

B$.$ Determine the overhead to be allocated to Job $21.$

C$.$ Determine total over applied or under applied overhead at the end of the year.

D$.$ Should cost of goods sold be increased or decreased at the end of the year? Why?

E$.$ If the amount of over applied or under applied overhead is material, how is it assigned?

F$.$ Suppose Job $21$ required a special fabric cover for the futon pads. This type of fabric dulls the blades of the cutting machine, and a number of fabric covers were unusable. Should this spoilage be recorded for Job $21$ or for all jobs processed this period? Explain your answer