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15 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 Ralance $15,000 $14,000 Raw materials Work In process Finished goods $11,000 $32.000 $123,e $108,000 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 17,000 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, $412,000 $(376,000 direct and $36,000 indirect). The following employee costs were incurred: direct labor, S330,000; indirect labor, $69,000; and administrative salaries, $157,000. Selling costs, $113,000. Factory utility costs, $29,000. Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 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: a. Prepare a schedule of cost of goods manufactured in good form. b. Was the overhead underapplied or overapplied? By how much? 16. A company should use process costing, rather than job order costing, if A. production is only partially completed during the accounting period. B. the product is manufactured in batches only as orders are received. C. the product is composed of mass-produced homogeneous units. D. the product goes through several steps of production.