Skoll Technologies has the following year-end balances in its three inventory accounts and cost of goods sold. Skoll also informs you that actual overhead for the year was $692,415. Net income, prior to any adjustment for under- or overapplied overhead, is $122,342 for the year.

Required:
a. What is Skoll’s under- or overapplied overhead for the year?
b. Suppose Skoll writes off under- or overapplied overhead directly to cost of goods sold. After the write-off, what would be Skoll’s net income for the year?
c. Suppose Skoll prorates under- or overapplied overhead among the accounts that contain overhead using their unadjusted year-end balances. After proration, what would be Skoll’s net income for the year?
d. Suppose Skoll prorates the under- or overapplied overhead among the accounts that contain overhead using the amount of overhead applied to each account. After this procedure, what would be Skoll’s net income for the year?
e. Briefly discuss why your answers to parts (b)–(d)differ.

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Work in imished Cost of Goods Sold Rat Matrias Process Goods Unadjusted year-end value $75,535.00 143,516.50 $215,274.75 $1,076,373.75 Amount of applied overhead included in account balance _ 61,183.35 95,174.10 523,457.55