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Question: The Ride minus on minus Wave Company? (ROW) produces a line of? non-motorized boats. ROW uses a ?normal-costing system and allocates manufacturing overhead using direct manufacturing labor cost. The following data are for 2014 ? Budgeted manufacturing overhead cost $135,000 Budgeted direct manufacturing labor cost $225,000 Actual manufacturing overhead cost $134,400 Actual direct manufacturing labor cost $229,000 2014 direct manufacturing Account, Ending Balance, labor cost in ending balance Work in process,”$33,400″,”$18,320″ Finished goods,”225,450″,”64,120″ Cost of goods sold,”576,150″,”146,560″ 1 Calculate the ending balances in work in? process, finished? goods, and cost of goods sold if? under- or over-allocated overhead is as? follows: a. Written off to cost of goods sold. b. Prorated based on ending balances? (before proration) in each of the three accounts. c. Prorated based on the overhead allocated in 2014 in the ending balances (before proration) in each of the three accounts. 2 Which method would you? choose? Justify your answer.

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