Under Lamprey Company's job-order costing system,manufacturing overhead is applied to Work in Process inventory using a predetermined overhead rate.During January,Lamprey's transactions included the following:
$\begin{array} { l r }
\text { Direct materials issued to production } & \$ 90,000 \
\text { Indirect matcrials issued to production } & \$ 8,000 \
\text { Manufacturing overhead cost incurred } & \$ 125,000 \
\text { Manufacturing overhead cost applied } & \$ 113,000 \
\text { Direct labour cost incurred } & \$ 107,000
\end{array}$
Lamprey Company had no beginning or ending inventories.What was the cost of goods manufactured for January?

Question

Under Lamprey Company's job-order costing system,manufacturing overhead is applied to Work in Process inventory using a predetermined overhead rate.During January,Lamprey's transactions included the following: 
$\begin{array} { l r } 
\text { Direct materials issued to production } & \$ 90,000 \
\text { Indirect matcrials issued to production } & \$ 8,000 \
\text { Manufacturing overhead cost incurred } & \$ 125,000 \
\text { Manufacturing overhead cost applied } & \$ 113,000 \
\text { Direct labour cost incurred } & \$ 107,000
\end{array}$
Lamprey Company had no beginning or ending inventories.What was the cost of goods manufactured for January?

Quizplus · Accepted Answer

The cost of goods manufactured is calculated by adding the total manufacturing costs to the beginning work in process inventory and subtracting the ending work in process inventory. As stated in the problem, there is no beginning or ending work in process inventory, so the formula simplifies to:

Cost of Goods Manufactured = Direct materials + Direct labor + Manufacturing overhead applied

Plugging in the numbers given in the problem, we get:

Cost of Goods Manufactured = $90,000 + $107,000 + $113,000 = $310,000

Therefore, the correct answer is B) $310,000.

Under Lamprey Company's Job-Order Costing System,manufacturing Overhead Is Applied to Work