ACCT 386-Froya Fabrikker A/S of Bergen, Norway, is a small

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 $388,800 of manufacturing overhead for an estimated allocation base of 810 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, $295,000.

b. Raw materials requisitioned for use in production (all direct materials), $280,000.

c. Utility bills were incurred, $78,000 (95% related to factory operations, and the remainder related to selling and administrative activities).

d. Salary and wage costs were incurred:   

Direct labor (890 hours) $325,000

Indirect labor $109,000

Selling and administrative salaries $205,000

e. Maintenance costs were incurred in the factory, $73,000.

f. Advertising costs were incurred, $155,000.

g. Depreciation was recorded for the year, $91,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment).

h. Rental cost incurred on buildings, $105,000 (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, $960,000.

k. Sales for the year (all on account) totaled $2,150,000. These goods cost $990,000 according to their job cost sheets.