Prepare an incorne staternent for the year. The company doses any underapplied or overapplicd overhead to Cost of Goods sold. 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: - 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 33,500 machine-hours and incur $268,000 in manufacturing overhead cost. The following transactions were recorded for the year: - Raw materials were purchased, $315,500. - Raw materials were requisitioned for use in production, $307,500 ( $280,500 direct and $27,000 indirect). - The following employee costs were incurred; direct labor, $377,500; indirect labor, $96,500; and administrative salaries, $172,500. - Selling costs, $147,500. - Factory utility costs, $10,500. - Depreciation for the year was $157,000 of which $140,000 is related to factory operations and $17,000 is related to selling, general, and administrative activities. - Manufacturing overhead was applied to jobs. The actual level of activity for the year was 34,100 machine-hours. - Sales for the year totaled $1,273,000