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 $ $15,000$ $ $23,000$

Work in process $ $28,000$ $ $10,000$

Finished Goods $ $63,000$ $ $78,000$

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 $34,000$ machine$-$hours and incur $$306,000$ in manufacturing overhead cost. The following transactions were recorded for the year:

Raw materials were purchased, $$316,000.$

Raw materials were requisitioned for use in production, $$308,000($$$280,000$ direct and $$28,000$ indirect$).$

The following employee costs were incurred: direct labor, $$378,000$; indirect labor, $$97,000$; and administrative salaries, $$173,000.$

Selling costs, $$148,000.$

Factory utility costs, $$11,000.$

Depreciation for the year was $$187,000$ of which $$174,000$ is related to factory operations and $$13,000$ is related to selling, general, and administrative activities.

Manufacturing overhead was applied to jobs. The actual level of activity for the year was $34,200$ machine$-$hours.

Sales for the year totaled $$1,330,000.$

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.