Vandelay Industries 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 following estimates were used in preparing the predetermined overhead rate at the beginning of the year:

Machine-hours		92,000
Fixed manufacturing overhead cost	$	1,443,000
Variable manufacturing overhead per machine-hour	$	3.10

During the year, a glut of furniture on the market resulted in cutting back production and a buildup of furniture in the companys warehouse. The companys cost records revealed the following actual cost and operating data for the year:

Machine-hours		55,000
Manufacturing overhead cost	$	975,000
Inventories at year-end:
Raw materials	$	420,000
Work in process (includes overhead applied of 47,160)	$	110,000
Finished goods (includes overhead applied of 366,400)	$	1,050,000
Cost of goods sold (includes overhead applied of 619,340)	$	2,710,000
A Compute the Companys predetermined overhead rate for the year. (round to 2 decimal points)

B Compute the underapplied or overapplied overhead for the year. (answer format: number then overapplied or underapplied)

C Record the journal entry to close out the overapplied or underapplied manufacturing overhead.

D What is the impact of your journal entry on the Company's net income? (Net Income increased or decreased)