Baab Corporation 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 $33,650$ machine$-$hours and incur $$279,295$ in manufacturing overhead cost. The

following transactions were recorded for the year:

Raw materials were purchased, $$315,650.$

Raw materials were requisitioned for use in production, $$307,650($ $$280,350$ direct and $$27,300$ indirect$).$

The following employee costs were incurred: direct labor, $$377,650$; indirect labor, $$96,650$; and administrative salaries,

$$172,650.$

Selling costs, $$147,650.$

Factory utility costs, $$10,650.$

Depreciation for the year was $$166,000$ of which $$151,000$ is related to factory operations and $$15,000$ is related to selling,

general, and administrative activities.

Manufacturing overhead was applied to jobs. The actual level of activity for the year was $34,130$ machine$-$hours.

Sales for the year totaled $$1,295,000.$

Required:

a$.$ Prepare a schedule of cost of goods manufactured.

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.Baab Corporation 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:

Beginning Balance Ending Balance

Raw materials $ $14,650$ $ $22,650$

Work in process $ $27,650$ $ $9,650$

Finished Goods $ $62,650$ $ $77,650$

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 $33,650$ machine$-$hours and incur $$279,295$ in manufacturing overhead cost. The following transactions were recorded for the year:

Raw materials were purchased, $$315,650.$

Raw materials were requisitioned for use in production, $$307,650($$$280,350$ direct and $$27,300$ indirect$).$

The following employee costs were incurred: direct labor, $$377,650$; indirect labor, $$96,650$; and administrative salaries, $$172,650.$

Selling costs, $$147,650.$

Factory utility costs, $$10,650.$

Depreciation for the year was $$166,000$ of which $$151,000$ is related to factory operations and $$15,000$ is related to selling, general, and administrative activities.

Manufacturing overhead was applied to jobs. The actual level of activity for the year was $34,130$ machine$-$hours.

Sales for the year totaled $$1,295,000.$

Required:

a$.$ Prepare a schedule of cost of goods manufactured.

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.