Question
Baba Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year:
Baba Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year:
|
| Beginning Balance | Ending Balance |
| Raw materials.............. | $22,000 | $25,000 |
| Work in process............ | $52,000 | $34,000 |
| Finished goods............. | $121,000 | $136,000 |
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 40,000 machine-hours and incur $200,000 in manufacturing overhead cost. The following transactions were recorded for the year:
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