Turramurra Furniture Company manufactures specialist furniture for use with computers .It uses a FIFO costing system to allocate costs to Finished Goods and maintains its financial records on a financial year which operates from 1 July 2018 to 30 June 2019 . The Work in Process Inventory on 31 May 2019 consisted of the following : Job No. Description Units Accumulated Cost SE523 Storage Equipment 20,000 $ 900,000 PS612 Printer Stand 25,000 250,000 CH421 Chair 15,000 431,000 Total $1,581,000 The Finished Goods Inventory at 31 May 2019 was as follows : Item Description Quantity and Unit cost Accumulated Cost Storage Equipment 7,500 units at $64 each $ 480,000 Printer Stand 21,000 units at $55 each 1,155,000 Chair 19,400 units at $35 each 679,000 Desk 11,200 units at $102each 1,142,400 Total $3,456,400 At the end of May 2019 the balance in Turramurra Furniture Company s Material Inventory Account was $668,000 .Purchases of Material Inventory during June were $638,000. The Raw Material requisitioned for jobs during June were as follows: Job No. $ SE523 155,000 PS612 211,000 CH421 13,800 DS174(5000 desks) 252,000 Turramurra Furniture Company applies manufacturing overhead on the basis of machine hours.The manufacturing overhead budget for the year totalled $4,500,000 and the company budgeted it would be using 900,000 machine hours .From July 2018 to the end of May 2019 the company has used 830,000 machine hours and its actual manufacturing overhead has amounted to $4,122,000. During the month of June 2019 machine hours ,labour hours and labour cost was as follows: Job No Machine Hours Labour Hours Labour Cost SE523 12,000 11,600 $ 122,400 PS612 19,500 14,300 200,500 CH421 4,400 3,600 43,200 DS174 14,000 12,500 138,000 Indirect labour 3,000 29,400 Supervision 57,600 Total 49,900 45,000 591,100 The jobs completed in June 2019 and the unit sales during June 2019 were as follows: Job No Description Quantity completed Unit sales SES523 Storage Equipment 19,000 17,500 PS612 Printer Stand 0 18,000 CH421 Chairs 14,000 21,000 DS174 Desks 5,000 6,000 Required: (a) Outline two different treatments for the over or underapplied overhead balances when using a job order costing system. ( b)If the Turramurra Furniture Company considers that a variation of $40,000 in the over or underapplication of overhead is material and must be dealt with appropriately in the accounts is the variation(over or underapplication of overhead) material? If it is what approach does the company use to adjust the over or underapplication of overhead? (c) The company is concerned with its calculation and application of overhead and has asked you to advise if it should consider using Activity Based Costing as it is considering expanding its product range and its concerns about overhead application .