As a result of a downturn in the economy, Optiplex Corporation has excess productive capacity. On January 1, Year 3, Optiplex signed a special order contract to manufacture custom-design generators for a new customer. The customer requests that the generators be ready for pickup by June 15, Year 3, and guarantees it will take possession of the generators by July 15, Year 3. Optiplex incurred the following direct costs related to the custom-design generators: Because of the company’s inexperience in manufacturing generators of this design, the cost of materials and parts included an abnormal amount of waste totaling $5,000. In addition to direct costs, Optiplex applies variable and fixed overhead to inventory using predetermined rates. The variable overhead rate is $2 per direct labor hour. The fixed overhead rate based on a normal level of production is $6 per direct labor hour. Given the decreased level of production expected in Year 3, Optiplex estimates a fixed overhead application rate of $9 per direct labor hour in Year 3. Required: Determine the amount at which the inventory of custom-design generators should be reported on Optiplex Corporation’s June 30, Year 3, balance sheet.