Hamilton Company uses job-order costing. Manufacturing overhead is applied using
ID: 2487592 • Letter: H
Question
Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined rate of 150% of direct labor cost. Any underapplied or overapplied manufacturing overhead is closed to Cost of Goods Sold at the end of each month. Additional information is available as follows: ° Job 101 was the only job in process at January 31. The job cost sheet for this job contained the following costs at the beginning of the month: ° Jobs 102, 103, and 104 were started during February. ° Direct materials requisitions for February totaled $26,000. ° Direct labor cost of $20,000 was incurred for February. ° Actual manufacturing overhead was $32,000 for February. ° The only job still in process at February 28 was Job 104, with costs of $2,800 for direct materials and $1,800 for direct labor. The cost of goods manufactured for February was: (Points : 2) A. 77,700 B. 78,000 C. 79,700 D. 85,000
Explanation / Answer
Answer: A. $77700
Begining WIP=(4000+2000+3000)=9000
Ending WIP=(2800+1800 +(1800*150%))
=$7300
Raw material used in Production $26,000 Direct labor 20000 Manufacturing overhead applied to WIP (20000*150%) 30000 Total manufacturing cost $76,000 Add: Work in Process, beginning 9000 85000 Less: Work in process, ending 7300 Cost of goods manufactured 77700Related Questions
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