Question - Baar 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:

Raw materials

-Beginning Balance: $26000

-Ending Balance: $20,000

Work in Process

-Beginning Balance: $71,000

-Ending Balance: $53,000

Finished goods

-Beginning Balance: $66000

-Ending Balance: $81,000

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 44,000 machine hours and incur $176,000 in manufacturing overhead costs. The following transactions were recorded for the year:

Raw materials purchased $459,000

Raw materials were requisitioned for use in production, $465,000($431,000 direct and $34,000 indirect)

Employee costs incurred: direct labor $296,000; indirect labor $63,000; aministrative salaries $157,000

Selling costs $134,000

Factory utility costs $14,000

Depreciation for the year was $119,000 of which $114,000 related to factory operations and $5,000 related to selling and admin activities

Manufacturing overhead was applied to all jobs. The actual level of activity for the year was 47,000 machine hours

Sales totaled $1,287,000

Prepare schedule of cost of goods manufactured in good form.

Was the overhead under-or overapplied? By how much.

Prepare an income statement for the year in good form. The company closes any under-or overapplied overhead to cost of goods sold.