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 $ $14,050$ $ $22,050$

Work in process $ $27,050$ $ $9,050$

Finished Goods $ $62,050$ $ $77,050$

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 $33,050$ machine$-$hours and incur $$234,655$ in manufacturing overhead cost. The following transactions were recorded for the year:

Raw materials were purchased, $$315,050.$

Raw materials were requisitioned for use in production, $$307,050($$$280,950$ direct and $$26,100$ indirect$).$

The following employee costs were incurred: direct labor, $$377,050$; indirect labor, $$96,050$; and administrative salaries, $$172,050.$

Selling costs, $$147,050.$

Factory utility costs, $$10,050.$

Depreciation for the year was $$130,000$ of which $$120,100$ is related to factory operations and $$9,900$ is related to selling, general, and administrative activities.

Manufacturing overhead was applied to jobs. The actual level of activity for the year was $34,010$ machine$-$hours.

Sales for the year totaled $$1,255,000.$

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.