1) Bakerston Company is a manufacturing firm that uses job-ordercosting. The company's inventory balances were as follows at thebeginning and end of the year:

	Beginning Balance	Ending 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 predeterminedoverhead rate based on machine-hours. At the beginning of the year,the company estimated that it would work 33,000 machine-hours andincur $231,000 in manufacturing overhead cost. The followingtransactions were recorded for the year:

• Raw materials were purchased, $315,000.

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

• The following employee costs were incurred: direct labour,$377,000; indirect labour, $96,000; and administrative salaries,$172,000.

• Selling costs, $147,000.

• Factory utility costs,$10,000.                                                                    

• Depreciation for the year was $127,000 of which $120,000 isrelated to factory operations and $7,000 is related to selling andadministrative activities.

• Manufacturing overhead was applied to jobs. The actual levelof activity for the year was 34,000 machine-hours.

• Sales for the year totalled $1,253,000.

Required:

a. Prepare a schedule of cost of goods manufactured in goodform.

b. Was the overhead underapplied or overapplied and by howmuch?

c. Prepare an income statement for the year in good form.