Part II Worth 26 points 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: Raw materials were purchased, $412,000. Raw materials were requisitioned for use in production, $409,000 $(362,000 direct and $47,000 indirect). The following employee costs were incurred: direct labor, $324,000; indirect labor, $57,000; and administrative salaries, $129,000. Selling costs, $135,000. Factory utility costs, $22,000. Depreciation for the year was $102,000 of which $94,000 is related to factory operations and $8,000 is related to selling, general, and administrative activities. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 44,000 machine-hours. Sales for the year totaled $1,198,000.