Durham Company uses a job order costing system. The following transactions took place last year: A. Raw materials requisitioned for use in production, $40,000 (80% direct and 20% indirect). B. Factory utility costs incurred $14,600. C. Depreciation recorded on plant and equipment, $28,000. Three fourths of the depreciation relates to factory equipment and the remainder relates to selling and administrative equipment. D. Costs for salaries and wages were incurred as follows: Direct labor $40,000, Indirect Labor $18,000 Sales Commissions $ 10,000 and Administrative Salaries $25,000 E. Insurance costs incurred $3,000 ( 80% relates to factory operations and 20% relates to selling and administrative activities). F Miscellaneous selling and administrative expenses incurred $18,000. G. Manufacturing overhead was applied to production. The company applies overhead on the basis of 150% of direct labor cost. H. Goods that cost $130,000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. I. Goods that had cost $120,000 to manufacture according to their job cost sheets were sold for $200,000. Question 1. Determine the underapplied or overapplied overhead for the year. Question 2. Prepare an income statement for the year. ( Hint: No calculations are required to determine the cost of goods sold before any adjustment for underapplied or overapplied overhead.)