Answer:
Cost of finished goods transferred $ 433,900
Explanation:
The cost of production is the sum of the direct cost plus the overhead adjusted for the work in progress.
This will be done as follows:
Direct material (199,000 - 31,200) 167,800
Direct labour (152,400 - 41,200) 111,200
Overhead ( See notes ) <u> 166,800</u>
Production cost 445,800
Add opening work in progress 15,900
Less closing work in progress <u> (27,800)</u>
Cost of finished goods transferred <u> 433,900
</u>
Notes :
<em>Overhead</em>
Total overhead = (31,200 + 41,200)= 72,400
Direct labour cost = 152,400 -41,200 =111,200
Overhead absorption rate = 150%
Absorbed overhead = 150% × 111,200 = 166800
