Carpenter Cornices, Ltd., produces a wide variety of cornice moldings for windows at a plant located in Evergreen Park, Illinois. Because there are hundreds of products, some of which are made only to order, the company uses a job-order costing system. On July 1, the start of the companys fiscal year, inventory account balances were as follows:

Raw materials	$	12,500
Work in process	$	6,500
Finished goods	$	10,200

The company applies overhead cost to jobs on the basis of machine-hours. Its predetermined overhead rate for the fiscal year starting July 1 was based on a cost formula that estimated $173,600 of manufacturing overhead for an estimated activity level of 56,000 machine-hours. During the year, the following transactions were completed (Assume all purchases and services were acquired on account):

a.	Raw materials purchased on account, $198,000.
b.	Raw materials requisitioned for use in production, $162,000 (materials costing $149,500 were chargeable directly to jobs; the remaining materials were indirect).
c.	Costs for employee services were incurred as follows:

Direct labor	$	109,000
Indirect labor	$	47,300
Sales commissions	$	33,500
Administrative salaries	$	52,500

d.	Prepaid insurance expired during the year, $27,000 ($17,300 of this amount related to factory operations, and the remainder related to selling and administrative activities).
e.	Utility costs incurred in the factory, $24,500.
f.	Advertising costs incurred, $14,400.
g.	Depreciation recorded on equipment, $37,000. ($24,500 of this amount was on equipment used in factory operations; the remaining $12,500 was on equipment used in selling and administrative activities.)
h.	Manufacturing overhead cost was applied to jobs, $?. (The company recorded 32,000 machine-hours of operating time during the year.)
i.	Goods that had cost $322,000 to manufacture according to their job cost sheets were completed.
j.	Sales (all on account) to customers during the year totaled $604,000. These goods had cost $321,000 to manufacture according to their job cost sheets.

2.	Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (dont forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account. (Round your intermediate calculations to 2 decimal places.)

3-a.	Is Manufacturing Overhead underapplied or overapplied for the year? (Round your intermediate calculations to 2 decimal places.)

3-b.	Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (Round your intermediate calculations to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

4.	Prepare an income statement for the year. (Round your intermediate calculations to 2 decimal places.)