The following information relates to the activities of King Ltd. for the year 2016:

The company uses normal costing and applies overhead on the basis of machine-hours (MH). The company had calculated its overhead rate to be $4.25 per MH on the basis of 60,000 budgeted MH. Actual MH worked in the plant was 63,200.
Required
1. Compute the amount of over allocated or under allocated overhead for the year.
2. Prepare the journal entry to record the disposition of the amount of over allocated or under allocated overhead assuming the company writes off the difference to Cost of Goods Sold.
3. Identify and briefly outline an alternative treatment (from requirement 2) for disposing of over allocated or under allocated overhead.
4. Briefly explain the differences between actual and normal costing, and state how the Schedule of Cost of Goods Manufactured would differ under actual costing.

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Advertising Costs Direct Labour Indirect Labour Factory Equipment Maintenance Ending Direct Materials Office Depreciation Purchases of Direct Materials Factory Supplies 320,000 61,400 13,300 42,500 13,000 156,000 4,400 62,500 Beginning Work-in-Process S 34,000 52,000 162,000 45,000 26,000 24,000 289,000 22,600 Beginning Direct Materials Factory Depreciation Ending Work-in-Process Factory Utilities Sales Commissions Corporate Salaries Insurance on Factory