The Ride-On-Wave Company (ROW) produces a line of non-motorized boats. ROW uses a normal-costing system and allocates manufacturing overhead using direct manufacturing labor cost.

The following data are for 2014:

Budgeted manufacturing overhead cost $125,000

Budgeted direct manufacturing labor cost $250,000

Actual manufacturing overhead cost $117,000

Actual direct manufacturing labor cost $228,000

Inventory balances on December 31, 2014, were as follows:

Account Ending balance 2014 direct manufacturing labor 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: 1. Calculate the predetermined overhead rate.

2. Compute the amount of under- or overapplied manufacturing overhead.

3. Calculate the ending balances in work in process, finished goods, and cost of goods sold if under- or overapplied manufacturing overhead is as follows:

a. Written off to cost of goods sold

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