Problem 1: Summit Company has provided the following inventory balances and manufacturing cost data for the month of January:
|
Inventories
|
January 1
|
January 31
|
|
Direct materials
|
$26,000
|
$36,000
|
|
Work in process
|
$24,000
|
$29,000
|
|
Finished goods
|
$68,000
|
$53,000
|
Month of January
|
Cost of goods manufactured
|
$597,000
|
|
Manufacturing overhead applied
|
$140,000
|
|
Direct materials used
|
$180,000
|
|
Actual manufacturing overhead
|
$152,000
|
Under Summit's job-order costing system, any over or underapplied overhead is closed to the Cost of Goods Sold account at the end of the calendar year (i.e., December 31).
How much direct labor cost was incurred during January?
- $282,000
- $288,000
- $272,000
- $277,000
Question 2:
The Bus Company uses a job-order costing system. The following information was recorded for September:
|
|
|
Cost Added During September
|
|
Job Number
|
September 1 Inventory
|
Direct Materials
|
Direct Labor
|
|
1
|
$1,450
|
$280
|
$210
|
|
2
|
$1,850
|
$230
|
$310
|
|
3
|
$900
|
$1,700
|
$160
|
|
4
|
$1,150
|
$4,700
|
$410
|
The direct labor wage rate is $10 per hour. Overhead is applied at the rate of $5 per direct labor-hour. Jobs 1, 2, and 3 have been completed and transferred to finished goods. Job 2 has been delivered to the customer.
The Cost of Goods Sold for September (before disposition of any underapplied or overapplied overhead) is:
- $2,395
- $4,145
- $2,545
- $6,370