Reference no: EM131816610

Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $360,000 of manufacturing overhead for an estimated allocation base of 900 direct labor-hours. The following transactions took place during the year (all purchases and services were acquired on account):

a. Raw materials purchased for use in production, $200,000.

b. Raw materials requisitioned for use in production (all direct materials), $185,000.

c. Utility bills were incurred, $70,000 (90% related to factory operations, and the remainder related to selling and administrative activities).

d. Salary and wage costs were incurred:

Direct labor (975 hours) $230,000

Indirect labor $90,000

Selling and administrative salaries $110,000

e. Maintenance costs were incurred in the factory, $54,000.

f. Advertising costs were incurred, $136,000.

g. Depreciation was recorded for the year, $95,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment).

h. Rental cost incurred on buildings, $120,000 (85% related to factory operations, and the remainder related to selling and administrative facilities).

i. Manufacturing overhead cost was applied to jobs, $ ?.

j. Cost of goods manufactured for the year, $770,000.

k. Sales for the year (all on account) totaled $1,200,000. These goods cost $800,000 according to thei