1. Powerful, Inc. has provided the following data pertaining to its last year of

Question

1. Powerful, Inc. has provided the following data pertaining to its last year of operations:

• Raw materials inventory on January 1 was $100,000.

• Raw materials inventory on December 31 was $70,100.
• Work in process inventory on January 1was $90,000.
• Work in process inventory on December 31 was $76,600.
• Finished goods inventory on January 1 was $210,000.
• Finished goods inventory on December 31 was $182,000.
• Raw material purchases during the year totaled $620,000.
• Direct labor cost incurred totaled $89,000.
• Manufacturing overhead costs actually incurred totaled $476,000.

• Manufacturing overhead costs applied to jobs (and transferred from Manufacturing Overhead to Work in Process) totaled $496,000.
• Sales totaled $2,202,000.
• Selling and administrative expenses incurred totaled $25,000.

How much was cost of goods manufactured?

$1,248,300

$1,718,300

$1,324,600

$1,299,900

$1,228,300

2. The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor cost ($) of:

80%

125%

300%

240%

200%

Could you please be kind enough and show me the solutions and answers in detail?

Thank you so much for reading this and have good one!

Explanation / Answer

1) Cost of goods manufactured :

so answer is a) 1248300

2) Manufacturing overhead = (2400-400-200-300-500) = 1000

Predetermine overhead rate = 1000*100/800 = 125%

so answer is b) 125%

Beginning raw material 100000 Raw material purchase 620000 Less: Ending raw material (70100) Raw material used 649900 Direct labour 89000 Manufacturing overhead applied 496000 Total manufacturing cost 1234900 Beginning work in process 90000 Ending work in process (76600) Cost of goods manufactured 1248300

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