Problem 8-35A (Part Level Submission) The Daniels Tool & Die Corporation has been in existence for a little over three years. The company's sales have been increasing each year as it builds a reputation The company manufactures dies to its customers' specifications and therefore uses a job-order cost system. Factory overhead is applied to the jobs based on direct labour hours-the absorption-costing (full) method. Overapplied or underapplied overhead is treated as an adjustment to Cost of Goods Sold. The company's income statements and other data for the last two years are as follows: DANIELS TOOL& DIE CORPORATION 2015-2016 Comparative Income Statements 2015 $830,000 $1,015,000 2016 Sales Cost of goods sold Finished goods, January 1 Cost of goods manufactured Total available Finished goods, December 31 Cost of goods sold before overhead adjustment Underapplied factory overhead 17,000 650,000 667,000 13,000 654,000 14,000 668,000 347,000 94,000 74,000 168,000 $98,000 $179,000 24,000 540,000 564,000 17,000 547,000 35,000 582,000 248,000 81,000 69,000 150,000 Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Problem 8-35A (Part Level Submission) The Daniels Tool & Die Corporation has been in existence for a little over three years. The company's sales have been increasing each year as it builds a reputation The company manufactures dies to its customers' specifications and therefore uses a job-order cost system. Factory overhead is applied to the jobs based on direct labour hours-the absorption-costing (full) method. Overapplied or underapplied overhead is treated as an adjustment to Cost of Goods Sold. The company's income statements and other data for the last two years are as follows: DANIELS TOOL& DIE CORPORATION 2015-2016 Comparative Income Statements 2015 $830,000 $1,015,000 2016 Sales Cost of goods sold Finished goods, January 1 Cost of goods manufactured Total available Finished goods, December 31 Cost of goods sold before overhead adjustment Underapplied factory overhead 17,000 650,000 667,000 13,000 654,000 14,000 668,000 347,000 94,000 74,000 168,000 $98,000 $179,000 24,000 540,000 564,000 17,000 547,000 35,000 582,000 248,000 81,000 69,000 150,000 Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income