The Charlies Company ("Charlies") produces a line of non-motorized boats. Charlies uses a normal-costing system and allocates manufacturing overhead using direct manufacturing labor cost. The following data are for 2020:

Budgeted manufacturing overhead cost $250,000

Budgeted direct manufacturing labor cost $125,000

Actual manufacturing overhead cost $220,000

Actual direct manufacturing labor cost $111,000

Inventory balances on December 31, 2020 (before adjustment) were as follows:

Account Ending balance ($) 2020 direct manufacturing labor cost in ending balance($)

Work in Process 40,000 1,000

Finished goods 120,000 10,000

Cost of goods sold 640,000 100,000

a. Calculate the manufacturing overhead allocation rate.

b. Compute the amount of under- or over-allocated manufacturing overhead. Is the amount underor over-applied?

c. Calculate the ending balances in work in process, finished goods and cost of goods sold (after adjustment) if under- or over-allocated manufacturing overhead is written off to cost of goods sold.

d. Calculate the ending balances in work in process, finished goods and cost of goods sold (after adjustment) if under- or over-allocated manufacturing overhead is prorated based on ending balances (before proration) in each of the three accounts.