The Zef Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2017:

Budgeted Manufacturing Overhead Costs	$ 4,875,000
Overhead Allocation Base	machine-hours
Budgeted machine-hours	75,000
Manufacturing Overhead Costs Incurred	$ 5,125,000
Actual machine-hours	80,000

Machine-hours data and the ending balances (before proration of under- or overallocated overhead) are as follows:

	Actual Machine-Hours	2017 End-of-Year Balance
Cost of Goods Sold	60,000	$ 8,500,000
Finished Goods Control	12,000	1,000,000
Work-in-Process Control	8,000	500,000

Question:

1.	Compute the budgeted manufacturing overhead rate for 2017.
2.	Compute the under- or overallocated manufacturing overhead of Zef Radiator in 2017. Dispose of this amount using the following:
	a.	Write-off to Cost of Goods Sold
	b.	Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold
	c.	Proration based on the overhead allocated in 2017 (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold
3.	Which method do you prefer in requirement 2? Explain.