S. accou produces Manufacturing Overhead Allocated. Production Company 4-25 Journal entries, T accounts and source documents. the year 2008. coveted small appliance market. The following data reflects activity for gadgets for the $124,000 Costs incurred. Purchases of direct materials (net) on credit 80,000 Direct manufacturing labor cost 54,500 Indirect labor 30,000 Depreciation, factory equipment 7,000 Depreciation, office equipment 20,000 Maintenance, factory equipment 9,500 Miscellaneous factory overhead 70,000 Rent, factory building 90,000 Advertising expense Sales commissions 30,000 Inventories: January 1, 2008 December 31, 2008 Direct materials 9,000 $11,000 Work in process 6,000 21,000 Finished goods 69,000 Production 24,000 direct Co. uses a normal cost system and allocates overhead to work in process at a rate of $2.50 per manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account for indirect materials