During 2017 Durham Manufacturing expected Job No. 51 to cost $300000 of overhead $500000 of materials and $200000 in labor. Durham applied overhead based on direct labor cost. Actual production required an overhead cost of $295000 $570000 in materials used and $220000 in labor. All of the goods were completed. What amount was transferred to Finished Goods?

Question

Quizplus · Accepted Answer

The amount transferred to Finished Goods is calculated by adding the actual costs of materials, labor, and applied overhead. The applied overhead is determined based on the predetermined overhead rate, which is calculated from the expected costs ($300,000 overhead / $200,000 labor = 1.5). The actual labor cost was $220,000, so the applied overhead is 1.5 * $220,000 = $330,000. Adding the actual costs: $570,000 (materials) + $220,000 (labor) + $330,000 (applied overhead) = $1,120,000.

During 2017 Durham Manufacturing Expected Job No