XYZ Company began operations during 2018 and employs a job-order costing system that applies overhead to jobs using direct labor hours as the…

XYZ Company began operations during 2018 and employs a job-order costing system that applies overheadto jobs using direct labor hours as the activity level. For 2018, XYZ Company had total estimated overheadof $225,000 and total estimated direct labor hours of 18,750.

Listed below is a summary of events and transactions that occurred during 2018:

a.     XYZ Company purchased 80,000 pounds of direct materials at $5.00 per pound.

b.     XYZ began work on three jobs.  Direct materials used for each job were:

            Job A-1 ………………     22,000 pounds            Job A-2 ………………     26,000 pounds            Job A-3 ………………     19,000 pounds

c.     Direct labor hours used for each job were:

            Job A-1 ………………     9,200 hours            Job A-2 ………………     8,500 hours            Job A-3 ………………     7,600 hours

       Direct labor workers are paid $15 per hour. 

d.     The following additional costs were incurred:

                                          Manufacturing Facility           Administrative Facility                Rent   ………………              $  82,000                                 $   15,000                Depreciation   …….                   95,000                                      12,000                Utilities   ………….                   71,000                                      10,000                Salaries   ………..…                  92,0001    65,000                Totals   ……………              $ 340,000                                   $ 102,000

            1 This $92,000 is all indirect labor.  See letter (c) for direct labor for the manufacturing facility.

e.     Jobs A-1 and A-2 were completed during 2011. 80% of the units from Job A-2 were sold to the       customer for $450,000.

Calculate the amount of net income reported on XYZ Company’s 2018 income statement. Do not usedecimals in your answer.