Question

Parker, Inc. has provided the following data for 2019: Materials Work-in-Process Finished Goods Beginning Inventory $24,000 $72,000 $108,000 Ending Inventory $18,000 $97,000 $82,000 Raw materials purchased for the year $310,000 Direct labor $480,000 Manufacturing Overhead: Estimated total manufacturing overhead for the year $1,000,000 Estimated total direct labor hours 10,000 Actual manufacturing overhead $975,000 Actual total direct labor hours 9,300 Calculate the raw materials used in production Calculate the predetermined overhead rate Calculate the total manufacturing costs for the year, assuming that all raw materials used are direct materials Calculate cost of goods manufactured for the year

Answer 1

Answer and Explanation:

The computation is shown below:

1) Raw material used is

= $24,000 + $310,000 - $18,000

= $316,000

2) Predetermined Overhead rate is

= $1,000,000 ÷ 10,000 direct labor hours

= $100 per DLH

3) Total manufacturing cost is

= $316,000  + $480,000 + $930,000  (9,300 ×$100)

= $1,726,000

4) Cost of goods manufactured is

= $72,000 + $1,726,000 - $97,000

= $1,701,000

In this way it is calculated