Dillon Corporation applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any under or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During May, the following transactions were recorded by the company:
Raw materials (all direct materials):
Purchased during the month
$38,000
Used in production
$35,000
Labor:
Direct labor-hours worked during the month
3,150
Direct labor cost incurred
$30,000
Manufacturing overhead cost incurred (total)
$24,500
Inventories:
Raw materials (all direct), May 31
$8,000
Work in process, May 1
$9,000
Work in process, May 31
$12,000*
*Contains $4,400 in direct labor cost.
The amount of direct materials cost in the May 31 Work in Process inventory account was:
A) $7,600
B) $2,000
C) $4,300
D) $6,300
Dillon Corporation applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any under or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During May, the following transactions were recorded by the company:
| Raw materials (all direct materials): | |
| Purchased during the month | $38,000 |
| Used in production | $35,000 |
| Labor: | |
| Direct labor-hours worked during the month | 3,150 |
| Direct labor cost incurred | $30,000 |
| Manufacturing overhead cost incurred (total) | $24,500 |
| Inventories: | |
| Raw materials (all direct), May 31 | $8,000 |
| Work in process, May 1 | $9,000 |
| Work in process, May 31 | $12,000* |
| *Contains $4,400 in direct labor cost. |
The amount of direct materials cost in the May 31 Work in Process inventory account was:
A) $7,600
B) $2,000
C) $4,300
D) $6,300
Related questions
Dacosta Corporation had only one job in process on May 1. Thejob had been charged with $2,300 of direct materials, $6,966 ofdirect labor, and $10,076 of manufacturing overhead cost. Thecompany assigns overhead cost to jobs using the predeterminedoverhead rate of $19.40 per direct labor-hour.
During May, the following activity was recorded:
| Raw materials (all directmaterials): | ||
| Beginning balance | $ | 9,000 |
| Purchased during the month | $ | 38,500 |
| Used in production | $ | 39,800 |
| Labor: | ||
| Direct labor-hours worked duringthe month | 2,400 | |
| Direct labor cost incurred | $ | 25,010 |
| Actual manufacturing overheadcosts incurred | $ | 33,800 |
| Inventories: | ||
| Raw materials, May 30 | ? | |
| Work in process, May 30 | $ | 17,067 |
Work in process inventory on May 30 contains $3,831 of directlabor cost. Raw materials consist solely of items that areclassified as direct materials.
The cost of goods manufactured for May was:
