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Ravsten Company uses a job-order costing system. The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company

Ravsten Company uses a job-order costing system.

The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 30,000 machine-hours and incur $150,000 in manufacturing overhead cost. The following transactions occurred during the year:

a. Raw materials requisitioned for use in production, $304,000 (75% direct and 25% indirect).
b. The following costs were incurred for employee services:

Direct labor $ 175,000
Indirect labor $ 33,000
Sales commissions $ 25,000
Administrative salaries $ 40,000

c.

Heat, power, and water costs incurred in the factory, $65,000.

d.

Insurance costs, $25,000 (85% relates to factory operations, and 15% relates to selling and administrative activities).

e.

Advertising costs incurred, $65,000.

f.

Depreciation recorded for the year, $75,000 (80% relates to factory operations, and 20% relates to selling and administrative activities).

g. The company used 55,000 machine-hours during the year.
h.

Goods that cost $495,000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse.

i.

Sales for the year totaled $730,000. The total cost to manufacture these goods according to their job cost sheets was $490,000.

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