Question

Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $217,200 of raw materials on credit; issued materials to production of $211,000 of which $34,800 were indirect. Minstrel incurred a factory payroll of $159,600, of which $44,800 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. Minstrel's beginning and ending Work in Process Inventory are $17,100 and $30,200 respectively. Compute the cost of product transferred to Finished Goods Inventory:

Answer 1

Answer:

The cost of product transferred to Finished Goods Inventory is $450,100

Explanation:

The computation of the cost of the product transferred to Finished Goods Inventory is shown below:

= Beginning Work in Process Inventory + direct material + direct factory payroll + overhead cost - Ending Work in Process Inventory

where,

Direct material = Total material - indirect material

                         = $211,000 - $34,800

                         = $176,200

Direct factory payroll = Total factory payroll - indirect labor

                                   = $159,600 - $44,800

                                   = $114,800

Overhead cost = 150% of direct labor cost

                         = 150% × $114,800

                         = $172,200

The other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

=  $17,100 + $176,200 + $114,800 + $172,200 - $30,200

= $450,100