Question

Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $226,800 of raw materials on credit; issued materials to production of $219,000 of which $37,200 were indirect. Minstrel incurred a factory payroll of $164,400, of which $47,200 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 $17,900 and $31,800 respectively. Compute the cost of jobs transferred to Finished Goods Inventory.

Answer 1

Answer:

$460,900

Explanation:

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

= beginning wip + Direct material + direct labor + manufacturing overhead - closing wip

= $17,900 + ($219,000 - $37,200) + ($164,400 - $47,200) + 150% of $117,200 - $31,800

= $17,900 + $181,800  + $117,200 + $175,800 - $31,800

= $460,900