Prime costs are a. direct materials and direct labor b. direct labor and factory overhead c. period costs and factory overhead d
1 answer:
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Answer: Option (B) is correct.
Explanation:
The nominal GDP is equal to the real GDP in the base year, that's why GDP deflator in the base year is equal to 100.
GDP deflator is calculated as the nominal GDP divided by the real GDP multiply by 100. It is shown as:
GDP deflator =
GDP deflator would be used as the conversion factor that transformed the real GDP into nominal GDP.
Answer:
Raw Material $191,000
Direct labor $300,000
Actual manufacturing overhead $170,000
Actual selling and administrative expenses $115,000
The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost.
1.
Prime Cost = Direct Material + Direct Labor
Prime Cost = $191,000 + $300,000 = 491,000
2.
Cost of goods manufactured $
Direct material $191,000
Add: Direct Labor $300,000
Add: Manufacturing overhead <u>$170,000</u>
Manufacturing cost <u>$661,000</u>
3.
Manufacturing cost $661,000
Add: Work in process inventory at January 1 $235,000
Less: Work in process inventory at January 31 <u>$251,000</u>
Cost of Goods Manufactured <u>$645,000</u>
4.
Cost of Goods Manufactured $645,000
Add: Finished Good inventory at January 1 $125,000
Less: Finished Good inventory at January 31 <u>$117,000</u>
Cost of Goods Sold <u>$653,000</u>
5.
Manufacturing overhead Account Balance
Actual overhead = $175,000
Manufacturing overhead = $180,000 (300,000 x 60% )
Over applied manufacturing overhead = $180,000 - $175,000
Over applied manufacturing overhead = $5,000
* Data was missing for the calculations, complete question is attached with this answer, Please find that.
