| Bakerston 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 | Ending Balance |
| Raw materials | $ | 11,900 | | $ | 15,100 | |
| Work in process | $ | 32,500 | | $ | 14,100 | |
| Finished goods | $ | 108,000 | | $ | 123,000 | |
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| 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 17,100 machine-hours and incur $256,500 in manufacturing overhead cost. The following transactions were recorded for the year: |
| Raw materials were purchased, $410,000. |
| Raw materials were requisitioned for use in production, $406,800 ($379,000 direct and $27,800 indirect). |
| The following employee costs were incurred: direct labor, $331,000; indirect labor, $73,000; and administrative salaries, $156,000. |
| Selling costs, $111,000. |
| Factory utility costs, $28,000. |
| Depreciation for the year was $130,000 of which $113,000 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 14,200 machine-hours. |
| Sales for the year totaled $1,284,000. |
| Required: |
| a. | Prepare a schedule of cost of goods manufactured in good form. (Do not round predetermined overhead rate. Input all amounts as positive values. Omit the "$" sign in your response.) |
| Schedule of Cost of Goods Manufactured |
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| Total raw materials available | | |
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| Raw materials used in production | | |
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| Total manufacturing cost | | |
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| Cost of goods manufactured | | $ |
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| b. | Was the overhead underapplied or overapplied? By how much? (Do not round predetermined overhead rate. Input the amount as a positive value. Omit the "$" sign in your response.) |
| Manufacturing overhead |
| $ |
| c. | Prepare an income statement for the year. The company closes any underapplied or overapplied overhead to Cost of Goods Sold. (Input all amounts as positive values. Omit the "$" sign in your response.) |
| Income Statement |
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| Selling and administrative expenses: | | |
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| $ | |
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| | $ |
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