During 2022 Durham Manufacturing estimated 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 total cost transferred to Finished Goods includes actual materials, actual labor, and applied overhead. Applied overhead is calculated as a percentage of actual labor cost. Estimated overhead rate = $300,000 / $200,000 = 1.5. Applied overhead = 1.5 * $220,000 = $330,000. Total cost = $570,000 (materials) + $220,000 (labor) + $330,000 (applied overhead) = $1,120,000.

During 2022 Durham Manufacturing Estimated Job No