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6. Ariel Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the company's inventory balances were as follows: Raw materials ..... Work in process..... Finished goods......... .$36,000 .$41,000 $104,000 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 21,000 machine-hours and incur $210,000 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were purchased, $346,000. b. Raw materials were requisitioned for use in production, $338,000 ($302,000 direct and $36,000 indirect). c. The following employee costs were incurred: direct labor, $360,000; indirect labor, $68,000; and administrative salaries, $111,000. d. Selling costs, $153,000. e. Factory utility costs, $29,000. f. Depreciation for the year was $102,000 of which $93,000 is related to factory operations and $9,000 is related to selling and administrative activities. g. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 19,000 machine-hours. h. The cost of goods manufactured for the year was $870,000. i. Sales for the year totaled $1,221,000 and the costs on the job cost sheets of the goods that were sold totaled $855,000. j. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold. 6. Ariel Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the company's inventory balances were as follows: Raw materials ..... Work in process..... Finished goods......... .$36,000 .$41,000 $104,000 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 21,000 machine-hours and incur $210,000 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were purchased, $346,000. b. Raw materials were requisitioned for use in production, $338,000 ($302,000 direct and $36,000 indirect). c. The following employee costs were incurred: direct labor, $360,000; indirect labor, $68,000; and administrative salaries, $111,000. d. Selling costs, $153,000. e. Factory utility costs, $29,000. f. Depreciation for the year was $102,000 of which $93,000 is related to factory operations and $9,000 is related to selling and administrative activities. g. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 19,000 machine-hours. h. The cost of goods manufactured for the year was $870,000. i. Sales for the year totaled $1,221,000 and the costs on the job cost sheets of the goods that were sold totaled $855,000. j. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold

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