Gathman Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The company's balance sheet at the beginning of the year was as follows: Gathman Corporation Balance Sheet January 1 Assets Cash Raw materials inventory Finished goods inventory Property, plant, and equipment (net) Total assets Liabilities and Equity Retained earnings Total liabilities and equity $ 999,780 27,290 72,385 784,040 $ 1,883,495 $ 1,883,495 $ 1,883,495 The standard cost card for the company's only product is as follows: Standard Quantity or Inputs Direct materials Direct labor Fixed manufacturing overhead Total standard cost per unit Hours 1.4 pounds 0.6 hours 0.6 hours Standard Price or Rate $4.00 per pound $ 29.00 per hour $4.80 per hour Standard Cost $ 5.60 17.40 2.88 $ 25.88 The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $72,000 and budgeted activity of 15,000 hours. During the year, the company completed the following transactions: