Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies. manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formuts that estimates $1,615,000 of total manufacturing overhead for an estimated activity level of 85,000 machine-hours: During the year, a large quantity of furniture on the market resulted in cutting back production and a bulidup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year: Required: 1. Compute the underapplied or overapplied overhead 2 Ansume that the compony closes any underapplied or overapplied overheod to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate joumal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplled overheod is allocated to Work in Process, Fintehed Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold? Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies. manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formuts that estimates $1,615,000 of total manufacturing overhead for an estimated activity level of 85,000 machine-hours: During the year, a large quantity of furniture on the market resulted in cutting back production and a bulidup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year: Required: 1. Compute the underapplied or overapplied overhead 2 Ansume that the compony closes any underapplied or overapplied overheod to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate joumal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplled overheod is allocated to Work in Process, Fintehed Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold