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:
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: 
Lamprey Company had no beginning or ending inventories.What was the cost of goods manufactured for January?

Quizplus · Accepted Answer

To calculate the cost of goods manufactured, we need to add up all the costs that were incurred during the month of January.

Direct materials used = $86,000 
Direct labor costs = $84,000 
Manufacturing overhead applied = $120,000 (based on the predetermined overhead rate of $30 per direct labor hour and actual direct labor hours worked of 4,000)

Total manufacturing costs = $290,000

Adding the beginning work in process (which is assumed to be zero in this case) gives us a subtotal of $290,000.

We then need to subtract out any ending work in process (also assumed to be zero) to get the cost of goods manufactured for the month.

Cost of goods manufactured = $290,000 - $0 = $290,000

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

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