Question

Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $212,400 of raw materials on credit; issued materials to production of $207,000 of which $33,600 were indirect. Minstrel incurred a factory payroll of $157,200, of which $43,600 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 $16,700 and $29,400 respectively. Compute the cost of jobs transferred to Finished Goods Inventory.

Answer 1

Answer:

$444,700

Explanation:

Use the following formula to calculate the cost of products transferred to finished goods

Cost of products transferred to finished goods = Beginning inventory + direct materials + Direct labor + Applied OH 150% - Ending Inventory

Placing values in the formula

Cost of products transferred to finished goods = 16,700 + ( $207,000 - $33,600 ) + ( $157,200 - $43,600 ) + ( ( $157,200 - $43,600 ) x 150% ) - $29,400

Cost of products transferred to finished goods = 16,700 + 173,400 + 113,600 + 170,400 - $29,400

Cost of products transferred to finished goods = $444,700