Activity 2 ABC is a Kuwaiti manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Ending Raw materials Work in process Finished Goods Beginning Balance KD 14,000 KD 27,000 KD 62,000 Balance KD 22,000 KD 9,000 KD 77,000 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 33,000 machine-hours and incur KD 231,000 in manufacturing overhead cost The following transactions were recorded for the year: - Raw materials were purchased, KD 315,000. - Raw materials were requisitioned for use in production, KD 307,000 (KD 281,000 direct and KD 26,000 indirect). The following employee costs were incurred: direct labor, KD 377,000; indirect labor, KD 96,000; and administrative salaries, KD 172,000. - Selling costs, KD 147,000. Factory utility costs, KD 10,000. Depreciation for the year was KD 127,000 of which KD 120,000 is related to factory operations and KD 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 34,000 machine-hours. - Sales for the year totaled KD 1,253,000. Required: Required: a. Prepare a schedule of cost of goods manufactured. Name: Student ID: Assignment 1 b. Was the overhead underapplied or overapplied? By how much? b. Was the overhead underapplied or overapplied? By how much? c. Prepare an income statement for the year. The company closes any underapplied or overapplied overhead to Cost of Goods Sold