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Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an

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Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $75,000 of manufacturing overhead for an estimated activity level of $50,000 direct labor dollars. At the beginning of the year, the inventory balances were as follow:s Raw materials Work in process Finished goods $10,000 4,600 $8,900 During the year, the following transactions were completed a. Raw materials purchased for cash, $ 162,000 b. Raw materials used in production, $148,000 (materials costing $127,000 were charged directly to jobs; the remaining materials were indirect) C. Cash paid to employees as follows Direct labor Indirect labor Sales commissions Administrative salaries 160,000 163,300 $ 23,000 $46,000 d. Cash paid for rent during the year was $18,800 ($13,400 of this amount related to factory operations, and the remainder related to selling and administrative activities) e. Cash paid for utility costs in the factory, $10,000 f. Cash paid for advertising, $13,000 g. Depreciation recorded on equipment, $23,000. ($18,000 of this amount related to equipment used in factory operations, the remaining $5,000 related to equipment used in selling and administrative activities.)

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