Bard Manufacturing uses a job order cost accounting system. During one month Bar

Question

Bard Manufacturing uses a job order cost accounting system. During one month Bard purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Bard incurred a factory payroll of $150,000, paid in cash, of which $40,000 is classified as indirect labor. Bard uses a predetermined overhead application rate of 150% of direct labor cost. Bard's beginning and ending Goods in Process Inventory are $15,500 and $27,000 respectively. Compute the cost of product transferred to Finished Goods Inventory: Question 24 options: $558,500. $440,000. $413,000. $428,500. $415,000.

Explanation / Answer

Cost of Goods transferred to finished goods inventories:

So, the correct option is $428,500.

Amount($) Opening WIP 15,500 Add: Direct Material issued 165,000(195,000 - 30,000) Add: Direct Labor 110,000 Add: Predetrmined O/H 165,000 (110,000 x 150%) Total 455,500 Less: Closing WIP 27,000 Cost of Product transferred to finished goods 428,500

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