Question

Dacosta Corporation had only one job in process on May 1. The job had been charged with $2,600 of direct materials, $6,966 of direct labor, and $10,160 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $20.00 per direct labor-hour. During May, the following activity was recorded: $ 9,300 $38,800 $40,100 Raw materials (all direct materials): Beginning balance Purchased during the month Used in production Labor: Direct labor-hours worked during the month Direct labor cost incurred Actual manufacturing overhead costs incurred Inventories: Raw materials, May 30 Work in process, May 30 2,700 $25,310 $34,100 $17,145 Work in process inventory on May 30 contains $3,885 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The cost of goods manufactured for May was:

Answer 1

Direct materials = $2,600

Direct labor= $6,966

Manufacturing overhead cost = $10,160

Work in process inventory, beginning = Direct materials + Direct labor+Manufacturing overhead cost

= 2,600+6,966+10,160

= $19,726

Overhead applied = Predetermined overhead rate x Actual direct labor hours

= 20 x 2,700

= $54,000

Raw materials, May 30 = Beginning balance+Purchases - Used in production

= 9,300+38,800-40,100

= $8,000

Schedule of Cost of Goods Manufactured
Beginning raw material inventory	9,300
Purchase of raw material	38,800
Total raw materials available	48,100
Ending raw material inventory	-8,000
Raw material used	40,100
Direct labor	25,310
Manufacturing Overhead applied	54,000
Total Manufacturing Cost	119,410
Beginning work in process inventory	19,726
Ending work in process inventory	-17,145
Cost of goods manufactured	$121,991

The cost of goods manufactured for May was $121,991

First option is correct.

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