Question 1 (15 marks) Part A Sim Lim Company has the following closing balances for the year ended December 30, 2020. Direct materials $15,000 DI Work-in-Process $34,500 DE Finished Goods $49,500 Dr Cost of Goods Sold $74,500 Dr Additional information is as follows: Cost of materials purchased during 2020 $41,000 Cost of direct materials used in production during 2020 $47,000 Cost of direct labour used in production during 2020 $40,000 Cost of goods completed during 2020 $102,000 Factory overhead allocated to production during 2020 $48,000 Required: 1. Compute the opening balance of Work-in-process. (2 marks) 2. Compute the opening balance of Finished Goods. (2 marks) 3. Discuss what you can observe about the flow of costs at Sim Lim Company. (4 marks) Part B MK Company has just finished its first year of operations. MK used a budgeted overhead rate to allocate manufacturing overhead to products. Actual manufacturing overhead incurred was $425,000 and $435,000 of overhead was allocated to Work-in-process. Budgeted manufacturing overhead was $465,000. Ending balances in the relevant accounts were: Work-in-Process $40,000 Finished Goods $80,000 Cost of Goods Sold $680,000 Required: 1. Compute the amount of underallocated or overallocated overhead. (2 marks) 2. Explain why MK Company's underallocated or overallocated overhead has occurred and the options to dispose of it