Randall Company manufactures products to customer specifications. A job costing
ID: 2498324 • Letter: R
Question
Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 116% of direct labor cost. Selected data concerning the past year's operation of the company are presented below. January 1 December 31 Direct materials $70,500 $37,200 Work in process $61,100 $38,800 Finished goods $107,000 $93,700 Other information Direct materials purchases $301,400 Cost of goods available for sale $897,900 Actual factory overhead $240,200 The total manufacturing costs for the year are: Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 116% of direct labor cost. Selected data concerning the past year's operation of the company are presented below. January 1 December 31 Direct materials $70,500 $37,200 Work in process $61,100 $38,800 Finished goods $107,000 $93,700 Other information Direct materials purchases $301,400 Cost of goods available for sale $897,900 Actual factory overhead $240,200 The total manufacturing costs for the year are:Explanation / Answer
Direct material cost = Direct materials at end + Direct materials purchases - Direct materials at beginning
= 37200 + 301400 - 70500
= 265100
Transfer from WIP to finished goods = Cost of goods available for sale + finished goods at end - finishd goods at beginnnig
= 897,900 + $93,700 - 107,000 =
= 884600
WIP = 884600 + 38,800 - 61,100 = 862300
factory overhead = $240,200
Factory overhead cost was applied at 116% of direct labor cost
Labor cost = 240200*100/116 = 207068
total manufacturing costs for the year are: Material cost + labor cost+ WIP + factory overhead
= 265100 + 207068 +862300 + $240,200
= 1574668
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