Reference no: EM132533819

Baba Company 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 Raw materials is $11,000

Ending Balance Raw materials is $15000

Beginning Balance Work in Process is $32000

Ending Balance Work in process is $14000

Beginning Balance Finished good is $108,000

Ending Balance Finished goods is $123000

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 17,000 machine-hours and incur $272,000 in manufacturing overhead cost.

The following transactions were recorded for the year:

Raw materials were purchased, $416,000.

Raw materials were requisitioned for use in production, $412000 $(376000 direct and $36000 indirect).

The following employee costs were incurred:

direct labor, $330000;

indirect labor, $69000; and

administrative salaries, $157000.

Selling costs, $113,000

Factory utility costs, $29000

• Depreciation for the year was $121000 of which $114,000 is related to factory operations and $7000 is related to selling, general, and administrative activities.
• Manufacturing overhead was applied to jobs. The actual level of activity for the year was 15,000 machine-hours.
• Sales for the year totaled $1,282,000

Required:

Question a. Can you help me prepare a schedule of cost of goods manufactured in good form.

Question b. Was the overhead underapplied or overapplied? By how much?

Question c. Can you help me prepare an income statement for the year in good form. The company closes any underapplied or overapplied manufacturing to cost of Goods Sold.