ezto.mheducation.com y is a canning company in Astoria. The company uses a norma

Question

ezto.mheducation.com y is a canning company in Astoria. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs, Budgeted fectory overhead for the year was $680,400, and management budgeted $324,000 of direct labor costs. During the year, the company incurred the following actual costs. ana Dlrect materials used Direct labor Factory overhead $384,000 306,000 658,000 The January 1 balances of inventory acounts are shown below $70,000 41,000 26,000 Materiais all direct Finished goods The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year The amount of direct materiais purchased during the year is out Pas O $391,000o O $388.000. $377000. O $380,000. O $374,000

Explanation / Answer

Direct materials purchased during the year=384000-70000+(70000*0.9)= $377000 Option 3 is correct

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