Question

The Milo Company's records for May contain the following information:
Actual direct labour hours 9,000 hours
Actual direct labour cost $47,000
Direct material purchased $16,000
Direct material used $14,000
Cost of goods sold $100,000
Overapplied overhead $5,000
Ending inventories:
Raw materials $30,000
Work in process 50,000
Finished goods 70,000

The company uses a predetermined overhead rate of $5.00 per direct labour hour to apply manufacturing
overhead to jobs.

48) What was the actual overhead cost incurred during the month? 48)
A) $50,000. B) $45,000. C) $40,000. D) $55,000.
49) What was the total cost added to Work in Process during May? 49)
A) $106,000. B) $101,000. C) $61,000. D) $111,000.
50) Assuming no beginning inventory for Work in Process, the cost of goods manufactured
is:
50)
A) $11,000. B) $51,000. C) $156,000. D) $56,000.

Answer with explanations please

Answer 1

48) Solution: 40,000

Working:

Applied manufacturing overhead ($5.00 * 9,000 hours)	45,000
Less overapplied manufacturing overhead	-5,000
Actual overhead cost incurred during the month	40,000

　

49) Solution: $106,000

Working:

Direct materials	14,000
Direct labor	47,000
Manufacturing overhead [ $5.00 × 9,000 ]	45,000
Total cost added to Work in Process	106,000

　

50) Solution: $56,000

Direct materials	14,000
Direct labor	47,000
Manufacturing overhead [ $5.00 × 9,000 ]	45,000
Less: Ending Work in process	-50,000
COGS	56,000