Question

Allen Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during the current period. Indirect abor amounted to $2,700 while indirect materials used totaled $1,600. Other operating costs pertaining to the factory included utilities of $3,100, maintenance of $4,500, supplies of $1,800, depreciation of $7,900, and property taxes of $2,600. There was no beginning or ending finished goods inventory, but work in process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance. Compute: 1. Total Factory Overhead for the period 2. Current period manufacturing costs 3. Cost of Goods manufactured.

choose one to answer

Answer 1

Solution 1:

Total factory overhead = Indirect labor + Indirect material + Utilities + Maintenance + Supplies + Depreciation + Property taxes

= $2,700 + $1,600 + $3,100 + $4,500 + $1,800 + $7,900 + $2,600

= $24,200

Solution 2:

Current period manufacturing cost = Direct material + Direct labor + Factory overhead

= $71,000 + $37,000 + $24,200 = $132,200

Solution 3:

Cost of goods manufactured = Beginning WIP + Current manufacturing cost - Ending WIP

= $5,500 + $132,200 - $7,500 = $130,200