38. Heart Manufacturing Company makes specialty tools. In January, Heart incurs manufacturing costs of $10,000,000 for direct materials, direct labor, and overhead. 20% of the total costs represents overhead applied. The overhead rate is S1 for every S2 of direct labor costs incurred. Inventory balances were: January 1, January 31 Raw materials $300,000 $500,000 400,000 600,000 Work in process 200,000 Finished goods 400,000 At the end of January, there was S1,000 ofoverapplied overhead. Instructions (a) Determine the cost of raw materials purchased in January. (b) Prepare a cost of goods manufactured schedule for January 2012. (c) Compute the cost of goods sold for January