1. Babb Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,000 machine-hours and incur $272,000 in manufacturing overhead cost. The following transactions were recorded for the year: - Raw materials were purchased, $416,000. -Raw materials were requisitioned for use in production, $412,000$(376,000 direct and $36,000 indirect). - The following employee costs were incurred: direct labor, $330,000; indirect labor, $69,000; and administrative salaries, $157,000. - Selling costs, $113,000. - Factory utility costs, $29,000. - Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling, general, and administrative activities. - Manufacturing overhead was applied to jobs. The actual level of activity for the year was 15,000 machine-hours. - Sales for the year totaled $1,282,000. Required: a. Prepare a schedule of cost of goods manufactured in good form. b. Was the overhead underapplied or overapplied? By how much