Question

PA7.

Answer 1

Answer:

cost of manufactured goods:   $ 685,375

Explanation:

Missing information attached:

we have to determinate the overhead rate:

expected overhead 270,000

expected labnor hours: 24,000

270,000 / 24,000 = $ 11.25 MO rate

then, we calculate the cost added during the month:

labor: 85,000

MO: 23,500 x 11.25 = 264,375

Raw materials:

solve using inventory identity:

$Beginning Inventory + Purchase = Ending Inventory + Used$

30,000 + 350,000 - 28,000  =  352,000

total cost added: 701,375

cost of manufactured goods:

$Beginning WIP + added = Ending WIP + COGM$

51,000 + 701,375 - 67,000 = 685,375