Problem:
1. Hacken Company has a job-order costing system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor cost. The information below has been taken from the cost records of Hacken Company for the past year:
|
Direct materials used in production
|
$1,250
|
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Total manufacturing costs charged to production during the year (includes direct materials, direct labor, and applied factory overhead)
|
$6,050
|
|
Manufacturing overhead applied
|
$2,800
|
|
Selling and administrative expenses
|
$1,000
|
|
Inventories:
|
|
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Direct materials, January 1
|
$130
|
|
Direct materials, December 31
|
$80
|
|
Work in process, January 1
|
$250
|
|
Work in process, December 31
|
$400
|
|
Finished goods, January 1
|
$300
|
|
Finished goods, December 31
|
$200
|
Required:
a. Compute the cost of direct materials purchased during the year.
b. Compute the predetermined overhead rate that was used during the past year.
c. Compute the Cost of Goods Manufactured for the past year.
d. Compute the Cost of Goods Sold for the past year.