At Allen Company, manufacturing overhead is applied at the rate of 160% of direct labor hour Overhead was estimated to be $540,000 and direct labor hours were estimated to be 360,000. Actual direct labor hours and actual direct labor costs for the year amounted to 400,000 hours and $700,000. In addition, Allen Company incurred the following actual costs during the year: * Administrative expenses, $100,000 * Depreciation expense on fixed assets, $500,000 (80% of the depreciation expense was related to manufacturing activities) Indirect material costs, $25,000 Indirect labor costs, $45,000 * Utility expense on the manufacturing facility, $125,000 Insurance expense on the manufacturing facility, $35,000 Marketing expenses, $75,000 Sales & promotion expenses, $25,000 Allen Company had the following inventory balances at the beginning and end of the year: January 1 December 31 Finished goods $450,000 $675,000 Work in process 600,000 650,000 Raw (direct) materials 350,000 400,000 During the year, the company purchased $150,000 of raw materials and generated sales of $2,500,000.