Under Eagle Co.'s job order costing system,manufacturing overhead is applied to Work-in-Process using a predetermined annual overhead rate.During February,Eagle's transactions included the following: Eagle had neither beginning nor ending inventory in Work-in-Process Inventory.What was the cost of jobs completed in February? (CPA adapted)
$$\begin{array} { | l | r | }
\hline \text { Direct materials issued to production } & \$ 90,000 \
\hline \text { Indirect materials issued to production } & 8,000 \
\hline \text { Manufacturing overhead incurred } & 125,000 \
\hline \text { Manufacturing overhead applied } & 113,000 \
\hline \text { Direct labor costs } & 107,000 \
\hline
\end{array}$$

Question

Under Eagle Co.'s job order costing system,manufacturing overhead is applied to Work-in-Process using a predetermined annual overhead rate.During February,Eagle's transactions included the following: Eagle had neither beginning nor ending inventory in Work-in-Process Inventory.What was the cost of jobs completed in February? (CPA adapted)
$$\begin{array} { | l | r | } 
\hline \text { Direct materials issued to production } & \$ 90,000 \
\hline \text { Indirect materials issued to production } & 8,000 \
\hline \text { Manufacturing overhead incurred } & 125,000 \
\hline \text { Manufacturing overhead applied } & 113,000 \
\hline \text { Direct labor costs } & 107,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Since there was no beginning or ending inventory, the cost of jobs completed would be equal to the total manufacturing costs incurred during the period. According to the information provided, the total manufacturing costs incurred in February would be:

Direct materials used = $90,000
Direct labor = $120,000
Manufacturing overhead applied (predetermined annual overhead rate x actual direct labor cost) = $100,000
Total manufacturing costs = $310,000

Therefore, the cost of jobs completed in February was $310,000.

Under Eagle Co A) $302,000