Bakerston 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: Raw materials Work in process Finished goods Beginning Balance $ 11,700 $ 32,900 $109,000 Ending Balance $ 15,900 $ 14,700 $125,000 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 18,000 machine-hours and incur $270,000 in manufacturing overhead cost. The following transactions were recorded for the year: Raw materials were purchased, $411,000. Raw materials were requisitioned for use in production, $406,800 ($386,000 direct and $20,800 indirect) The following employee costs were incurred: direct labor, $333,000; indirect labor, $71,000; and administrative salaries, $154,000 Selling costs, $114,000 Factory utility costs, $28,000 Depreciation for the year was $121,000 of which $110,000 is related to factory operations and $11,000 is related to selling, general, and administrative activities Manufacturing overhead was applied to jobs. The actual level of activity for the year was 14,300 machine-hours. Sales for the year totaled $1,288,000