Hudson Company uses a job-order costing system. The following transactions took

Question

Hudson Company uses a job-order costing system. The following transactions took place last year:
a. Raw materials were requisitioned for use in production, $38,500 (70% direct and 30% indirect).
b. Factory utility costs incurred, $19,210.
c. Depreciation was recorded on plant and equipment, $36,300. Three-fourths of the depreciation related to factory equipment, and the remainder related to selling and administrative equipment.
d. Advertising expense incurred, $47,000.
e. Costs for salaries and wages were incurred as follows:


Direct labor $ 46,300
Indirect labor $ 10,110
Administrative salaries $ 29,100

f. Insurance costs, $3,040 (85% related to factory operations, and 15% related to selling and administrative activities).
g. Miscellaneous selling and administrative expenses incurred, $9,480.
h. Manufacturing overhead was applied to production. The company applies overhead on the basis of $7.60 per machine-hour; 7,470 machine-hours were recorded for the year.
i. Goods that cost $138,800 to manufacture according to their job cost sheets were transferred to the finished goods warehouse.
j. Sales for the year totaled $250,700. The total cost to manufacture these goods according to their job cost sheets was $129,600.

Requirement 1:

Determine the underapplied or overapplied overhead for the year. (Input all amounts as positive values. Omit the "$" sign in your response.)


Overhead
$

Requirement 2:

Prepare an income statement for the year. (Hint: No calculations are required to determine the cost of goods sold before any adjustment for underapplied or overapplied overhead.) (Input all amounts as positive values. Omit the "$" sign in your response.)

Hudson Company
Income Statement
For the Year Ended December 31
$




Selling and administrative expenses:
$










$

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Explanation / Answer

b. Factory utility costs incurred, $19,210.

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