Before the application of overhead costs Veccio Corporation has the following costs traced to production: $$\begin{array} { c c c }
& \text { Direct Materials } & \text { Direct Labour } \
\text { Charged to production } & \$ 30000 & \$ 40000
\end{array}$$ Assuming that overhead is applied at the rate of 100% of direct labour cost what is the amount of inventory finished for the period assume no work in process ?

Question

Before the application of overhead costs Veccio Corporation has the following costs traced to production: $$\begin{array} { c c c } 
& \text { Direct Materials } & \text { Direct Labour } \
\text { Charged to production } & \$ 30000 & \$ 40000
\end{array}$$ Assuming that overhead is applied at the rate of 100% of direct labour cost what is the amount of inventory finished for the period assume no work in process ?

Quizplus · Accepted Answer

The total cost of inventory finished includes direct materials, direct labor, and applied overhead. Direct materials are $30,000, direct labor is $40,000, and overhead is 100% of direct labor, which is $40,000. Therefore, the total cost is $30,000 + $40,000 + $40,000 = $110,000.

Before the Application of Overhead Costs Veccio Corporation Has the Following