Markham Industries is a manufacturing firm that uses job-order costing. The company's inventory balances at the beginning and end of the year were as follows:

Beginning

Ending

Balance

Balance

Balance

Raw materials

$14,000

$22,000

Work in process

$27,000

$9,000

Finished goods

$62,000

$77,000

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 33,000 machine hours and incur $231,000 in manufacturing overhead cost. The following transactions were recorded for the year:

a)Raw materials purchased: $315,000.

b)Raw materials requisitioned for use in production: $307,000 ($281,000 direct and $26,000 indirect).

c) The following employee costs were incurred:

Direct labour: $377,000

Indirect labour: $96,000

Administrative salaries: $172,000

d)Selling costs: $147,000.

e)Factory utility costs: $10,000.

f)Depreciation for the year: $127,000, of which $120,000 is related to factory operations and $7,000 is related to selling and administrative activities.

g)Manufacturing overhead was applied to jobs. The actual level of activity for the year was 34,000 machine hours.

h)Sales for the year: $1,253,000.

How would you make a schedule of cost of goods manufactured in good form??

How do you find out if the under- or over-applied overhead?By how much?

How would you make an income statement for the year in good form? if company closes out any under- or over-applied overhead to Cost of Goods Sold?