Chapter 03s

# It calculates the cost of raw material and direct

This preview shows pages 37–46. Sign up to view the full content.

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.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
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
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.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
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.
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

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
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

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
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?
3-45 Disposition of Under- or  Overapplied Overhead \$30,000 may be closed directly to cost of goods sold.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern