Question

Beckner Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 139,000 and estimated factory overhead is $903,500. The following information is for September. Job X was completed during September, while Job Y was started but not finished September 1, inventories: Materials Work-in-process (All Job X) Finished goods $ 24,600 54,000 106,200 $163,000 Materials purchases Direct materials requisitioned: Job X Job Y $ 74,600 68,600 Direct labor hours: Job X Job Y 7,600 6,100 Labor costs incurred: Direct labor ($6.60 per hour) Indirect labor Factory supervisory salaries $ 90,420 30,000 11,700 Rental costs: Factory Administrative offices $ 9,900 3,800 Total equipment depreciation costs: Factory Administrative offices Indirect materials used ş 11,000 3,400 $ 20,100

Answer 1

Overhead rate = 903500/139000 = $6.50 per labor hour

Cost of goods manufactured is Job X because job Y is not completed :

Beginning WIP (Job X)	54000
Direct material	74600
Direct labor (7600*6.6)	50160
Overhead applied (7600*6.5)	49400
Total	228160

So answer is b) $228160