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Stephen MJ 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

$35,000$

Fixed manufacturing overhead cost

$$725,000$

Variable manufacturing overhead per machine$-$hour

$$5\mathrm{.}00$

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

Machine$-$hours

$86,000$

Manufacturing overhead cost

$$2,125,000$

Inventories at year$-$end:

$$Raw materials

$$420,000$

$$Work in process

$$110,000$

Finished goods

$$1,050,000$

Cost of goods sold

$$2,710,000$

Do not use $"$$$"$ or $","$ in answers.$$ Round POHR to $2$ decimal$$points$,$ round all other numbers to the nearest dollar

Compute the Company$$s predetermined overhead rate for the year.

Compute the Allocated overhead$$

$$Compute the$$underallocated$$or$$overallocated$$overhead for the year. $($Answer Format:$$ Number and then$$UnderAllocated$$or$$OverAllocated$)$

Based on your answer for $$C$$ record the proper journal entry to close out$$overallocated$/$underallocated$$manufacturing overhead.$$

Journal Entry Format:

Debit:$$ Account #

Credit:$$ Account #

What is the impact of your journal entry on the Company$$s net income?

$($Hint Answer options:$$ Increase, Decrease, Stays the Same, No Change, Please ask someone else$)$

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