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 $207,000 of raw materials on credit; issued materials to production of $204,000 of which $21,000 were indirect. Bard incurred a factory payroll of $159,000, paid in cash, of which $31,000 is classified as indirect labor. Bard uses a predetermined overhead application rate of 150% of direct labor cost. The total manufacturing costs added during the period are: $524,000. $580,500. $503,000. $601,500. $549,500.

Explanation / Answer

The total manufacturing costs added during the period = materials issued to production + factory payroll expenses + Overhead

= (204,000-21000)+ (159,000-31,000) + 150% of (159000-31000)

= 183,000 + 128,000 + 192,000

= $503,000 ....ANS

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