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Babb 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	$	11,100		$	15,700
Work in process	$	32,200		$	14,100
Finished goods	$	101,000		$	120,000

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 17,700 machine-hours and incur $265,500 in manufacturing overhead cost. The following transactions were recorded for the year:

	Raw materials were purchased, $415,000.
	Raw materials were requisitioned for use in production, $410,400 ($379,000 direct and $31,400 indirect).
	The following employee costs were incurred: direct labor, $331,000; indirect labor, $75,000; and administrative salaries, $151,000.
	Selling costs, $111,000.
	Factory utility costs, $22,000.
	Depreciation for the year was $130,000 of which $112,000 is related to factory operations and $18,000 is related to selling, general, and administrative activities.
	Manufacturing overhead was applied to jobs. The actual level of activity for the year was 14,900 machine-hours.
	Sales for the year totaled $1,289,000.

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
Direct materials:
(Click to select) Beginning work in process inventory Raw materials inventory, beginning Ending work in process inventory Raw materials inventory, ending Finished goods inventory, beginning	$
(Click to select) Deduct Add : (Click to select) Raw materials inventory, ending Purchases of raw materials Ending work in process inventory Beginning work in process inventory Finished goods inventory, beginning
Total raw materials available
(Click to select) Deduct Add : (Click to select) Raw materials inventory, ending Ending work in process inventory Purchases of raw materials Raw materials inventory, beginning Beginning work in process inventory
Raw materials used in production		$
(Click to select) Deduct Add : (Click to select) Direct materials Indirect labor Indirect materials Direct labor Raw materials inventory, beginning
(Click to select) Direct materials Finished goods Indirect materials Indirect labor Direct labor
(Click to select) Ending work in process inventory Purchases of raw materials Direct labor Raw materials inventory, beginning Raw materials inventory, ending
(Click to select) Purchases of raw materials Manufacturing overhead applied to work in process Direct labor Raw materials inventory, beginning Raw materials inventory, ending
Total manufacturing cost
(Click to select) Deduct Add : (Click to select) Raw materials inventory, ending Purchases of raw materials Ending work in process inventory Raw materials inventory, beginning Beginning work in process inventory
(Click to select) Add Deduct : (Click to select) Purchases of raw materials Raw materials inventory, ending Beginning work in process inventory Ending work in process inventory Raw materials inventory, beginning
Cost of goods manufactured		$

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 (Click to select) overapplied underapplied

$

c.

Prepare an income statement for the year in good form. Prepare off-line Cost of Goods Sold Statement and close any underapplied or overapplied overhead to Cost of Goods Sold and use the Adjusted Cost of Goods Sold to answer this requirement. (Input all amounts as positive values. Omit the "$" sign in your response.)

Income Statement
(Click to select) Selling costs Administrative salaries Depreciation Direct materials Cost of goods sold (adjusted) Sales		$
(Click to select) Sales Depreciation Administrative salaries Cost of goods sold (adjusted) Selling costs
(Click to select) Gross loss Gross margin
Selling and administrative expenses:
(Click to select) Rent expense Administrative salaries Insurance expense Depreciation Direct materials Selling costs	$
(Click to select) Direct materials Depreciation Insurance expense Rent expense Selling costs Administrative salaries
(Click to select) Administrative salaries Depreciation Rent expense Direct materials Selling costs Insurance expense
(Click to select) Net operating loss Net operating income		$

N

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