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Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor- hours. Its predetermined overhead rate was based on a cost formula that estimated $336,000 of manufacturing overhead for an estimated allocation base of 1,050 direct labor-hours. The following transactions took place during the year: a. Raw materials purchased on account, $245,000. b. Raw materials used in production (all direct materials), $230,000. c. Utility bills incurred on account, $68,000 (85% related to factory operations, and the remainder related to selling and administrative activities). d. Accrued salary and wage costs: Direct labor (1,125 hours) Indirect labor Selling and administrative salaries $ 275,000 $ 99,000 $ 155,000 e. Maintenance costs incurred on account in the factory, $63,000 f. Advertising costs incurred on account, $145,000. g. Depreciation was recorded for the year, $81,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). h. Rental cost incurred on account, $106,000 (75% related to factory facilities, and the remainder related to selling and administrative facilities). i. Manufacturing overhead cost was applied to jobs, $_?. j. Cost of goods manufactured for the year, $860,000. k. Sales for the year (all on account) totaled $1,650,000. These goods cost $890,000 according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were: Raw Materials Work in Process Finished Goods $ 39,000 $ 30,000 $ 69,000 1 The raw materials were purchased for use in production, $245,000 on account. 2 The raw materials used in production (all direct materials), $230,000. 3 The utility bills were incurred on account, $68,000 (85% related to factory operations, and the remainder related to selling and administrative activities). 4 The salary and wage costs accrued were $275,000 (Direct labor), $99,000 (Indirect labor), $155,000 (Selling and administrative salaries). 5 The maintenance costs were incurred on account in the factory, $63,000. 6 The advertising costs were incurred on account, $145,000. 7 The depreciation was recorded for the year, $81,000 (70% related to factory equipment, and the remainder related to selling and administrative equipment). 8 The entry for rental cost incurred on account on buildings, $106,000 (75% related to factory facilities, and the remainder related to selling and administrative facilities). 9 The entry for manufacturing overhead cost applied to jobs. 10 The cost of goods manufactured for the year, $860,000. 11 The sales for the year (all on account) totaled $1,650,000. 12 The goods cost $890,000 according to their job cost sheets. Accounts Receivable Sales Beg. Bal. Beg. Bal. End. Bal. End. Bal. Raw Materials Cost of Goods Sold Beg. Bal. Beg. Bal. End. Bal. End. Bal. Work in Process Manufacturing Overhead Beg. Bal. Beg. Bal. End. Bal. End. Bal. Finished Goods Advertising Expense Beg. Bal. Beg. Bal. End. Bal. End. Bal. Accumulated Depreciation Utilities Expense Beg. Bal. Beg. Bal. End. Bal. End. Bal. Accounts Payable Salaries Expense Beg. Bal. Beg. Bal. End. Bal. End. Bal. Depreciation Expense Salaries & Wages Payable Beg. Bal. Beg. Bal. End. Bal. End. Bal. Rent Expense Beg. Bal. End. Bal. Froya Fabrikker A/S Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Materials used in production Total manufacturing costs Cost of goods manufactured Journal entry worksheet