The status of all job activity occurring during January for XYZ Manufacturing is shown below: Job # X-1 X-2 X-3 X-4 Beginning WIP Inventory $0 $15,000 $0 $26,000 January Direct costs incurred: Direct Material $13,000 $24,000 $9.000 $11,000 Direct Labor $ 6,000 $ 2,000 $7,000 $13,000 Job status - end of January Unfinished Finished and Sold Unfinished Finished not Sold XYZ applies manufacturing overhead (M/O) to jobs using an annual predetermined M/O rate of $0.50 per Direct Labor DOLLAR (NOT Hour). Actual manufacturing overhead incurred during January was $10,500. The Defacto Manufacturing Company applies Manufacturing Overhead (M/O) using Normal Costing and therefore uses an annual predetermined overhead rate. Using this rate resulted in M/O being significantly under applied for one month during the fiscal year. Top management has determined this was caused by inaccurate estimates and asked you what accounting treatment should be applied to these dollars of under applied M/O. Prorate to RM. WIP, and FG Inventory and to C/G/Sold Prorate to WIP and FG Inventory and to C/G/Sold Do nothing Expense all of it The status of all job activity occurring during January for XYZ Manufacturing is shown below: Job # X-1 X-2 X-3 X-4 Beginning WIP Inventory $0 $15,000 $0 $26,000 January Direct costs incurred: Direct Material $13,000 $24,000 $9.000 $11,000 Direct Labor $ 6,000 $ 2,000 $7,000 $13,000 Job status - end of January Unfinished Finished and Sold Unfinished Finished not Sold XYZ applies manufacturing overhead (M/O) to jobs using an annual predetermined M/O rate of $0.50 per Direct Labor DOLLAR (NOT Hour). Actual manufacturing overhead incurred during January was $10,500. The Defacto Manufacturing Company applies Manufacturing Overhead (M/O) using Normal Costing and therefore uses an annual predetermined overhead rate. Using this rate resulted in M/O being significantly under applied for one month during the fiscal year. Top management has determined this was caused by inaccurate estimates and asked you what accounting treatment should be applied to these dollars of under applied M/O. Prorate to RM. WIP, and FG Inventory and to C/G/Sold Prorate to WIP and FG Inventory and to C/G/Sold Do nothing Expense all of it