Problem: Jansen 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 the Jansen company for the past year:
Direct materials use in production $1250
Total manufacturing costs charged to production during the year $6050
(includes direct materials, direct labor and applied factory
overhead)
Manufacturing overhead applied $2800
Selling and administrative expenses $1000
Inventories:
Direct materials, January 1 $130
Direct materials December 31 $80
Work in process January 1 $250
Work in process December 31 $400
Finished good January 1 $300
Finished goods December 31 $200
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