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Baba Company is a manufacturing firm that uses job-order costing. The company\'s

ID: 2703858 • Letter: B

Question

Baba Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning Balance Ending Balance Raw materials............ $22,000 $25,000 Work in process.......... $52,000 $34,000 Finished goods........... $121,000 $136,000 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 40,000 machine-hours and incur $200,000 in manufacturing overhead cost. The following transactions were recorded for the year:

Explanation / Answer

a. Schedule of cost of goods manufactured

Estimated total manufacturing overhead (a) ....................... $200,000

Estimated total machine-hours (b) ...................................... 40,000

Predetermined overhead rate (a)