Voltus Communications, a manufacturer of communications equipment, uses a job costing system. Manufacturing overhead is applied based on machine hours and it uses a predetermined overhead rate with budgeted overhead of $3,600,000 for the year and 80,000 machine hours.

Voltus uses a financial year of 1 July 2018 to 30 June 2019 and all the activities for the year have been carried out. Summarised details for period 1 July 2018 to 31 May 2019 and for June 2019 follow. Jobs B12- 008,K12-009 and K12-011 were completed during June 2019 .All completed jobs except K12-009 have been sold by 30 June 2019.

Jobs in process at 31 May 2019
Job numbers	Balance at 31 May 2019
B12-008	$263,000
K12-009	163,000
K12-011	0
L15-005	0
L15-006	0
Total	426,000

Work carried out during June 2019
Job numbers	Direct material	Direct labour	Machine hours
B12-008	$2,500	13,500	300
K12-009	14,000	36,000	1,000
K12-011	71,800	85,100	1,400
L15-005	118,700	55,000	2,500
L15-006	78,000	50,400	800
Totals	$285,000	$240,000	6,000

Actual Manufacturing Overhead incurred	1July 2018 -31 May 2019	During June 2019
Indirect material	$375,000	$27,000
Indirect labour	1,035,000	90,000
Utilities	735,000	66,000
Depreciation	1,155,000	105,000
Total overhead	$3,300,000	288,000
Other information
	1 July 2018 31 May 2019	During June 2019
Raw Material purchases *	$2,895,000	$294,000
Direct labour cost	2,535,000	240,000
Machine hours	73,000	6,000

Account balances 1 July
Raw Material Inventory	$315,000
Work in Process Inventory	180,000
Finished Goods Inventory	375,000
Account balance 30 June 2019 Raw Material Inventory	$255,000

*Raw material purchases and raw material inventory consist of both direct and indirect materials

Required:

1.Outline the different methods that could be used to dispose of the overapplied or underapplied overhead and explain which method would be preferred in the current

2. Determine the balance in the finished goods account at 30 June