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It calculates the cost of raw material and direct

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It calculates the cost of raw  material and direct labor used in  production and the amount of  manufacturing overhead  applied  to production. It calculates the manufacturing costs associated with goods that were finished during the period.
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3-38 Quick Check  ü Beginning raw materials inventory was $32,000. During the month, $276,000 of raw material was purchased. A count at the end of the month revealed that $28,000 of raw material was still present. What is the cost of direct material used? a. $276,000 b. $272,000 c. $280,000 d. $ 2,000
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3-39 Quick Check  ü Direct materials used in production totaled $280,000. Direct labor was $375,000, and $180,000 of manufacturing overhead was added to production for the month. What were total manufacturing costs incurred for the month? a. $555,000 b. $835,000 c. $655,000 d. Cannot be determined.
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3-40 Quick Check  ü Beginning work in process was $125,000. Manufacturing costs added to production for the month were $835,000. There were $200,000 of partially finished goods remaining in work in process inventory at the end of the month. What was the cost of goods manufactured during the month? a. $1,160,000 b. $ 910,000 c. $ 760,000 d. Cannot be determined.
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3-41 Quick Check  ü Beginning finished goods inventory was $130,000. The cost of goods manufactured for the month was $760,000. And the ending finished goods inventory was $150,000. What was the cost of goods sold for the month? a. $ 20,000 b. $740,000 c. $780,000 d. $760,000
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3-42 Underapplied and Overapplied  Overhead A Closer Look The difference between the overhead cost applied to  Work in Process and the actual overhead costs of a  period is referred to as either underapplied or  overapplied overhead. Underapplied overhead exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is less than the total amount of overhead actually incurred during the period. Overapplied overhead exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is greater than the total amount of overhead actually incurred during the period.
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3-43 PearCo’s actual overhead for the year was $650,000 with a total of 170,000 direct labor hours worked on jobs. How much total overhead was applied to PearCo’s jobs during the year? Use PearCo’s predetermined overhead rate of $4.00 per direct labor hour. Overhead Application Example Overhead Applied During the Period Applied Overhead = POHR × Actual Direct Labor Hours Applied Overhead = $4.00 per DLH × 170,000 DLH = $680,000
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3-44  PearCo’s  actual overhead  for the year was  $650,000   with a total of  170,000  direct labor hours worked  on jobs. How much total overhead was applied to PearCo’s  jobs during the year?  Use PearCo’s predetermined  overhead rate of $4.00 per direct labor hour.  Overhead Applied During the Period Applied Overhead = POHR × Actual Direct Labor Hours Applied Overhead = $4.00 per DLH × 170,000 DLH = $680,000 Overhead Application Example PearCo has overapplied overhead for the year by $30,000. What will PearCo do?
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3-45 Disposition of Under- or  Overapplied Overhead $30,000 may be closed directly to cost of goods sold.
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