Question

Spruce Company uses a job costing system. Spruce Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31.

Cost of goods manufactured $124,100​
Cost of direct materials used $42,800​
Cost of direct labor ($36 per hour) $73,800​
Work in process inventory, August 1 $15,200​
Manufacturing overhead cost is allocated at the rate of $23 per direct labor hour.

What is the amount of allocated manufacturing overhead costs for August?

Answer 1

The amount of allocated manufacturing overhead costs for August is $47,150

Step-by-step explanation:

For computing the allocated manufacturing overhead costs, first we have to compute the direct labor hours which is shown below:

= Direct labor cost ÷ per hour rate

= $73,800 ÷ $36

= 2,050 hours

Now the allocated manufacturing overhead costs equals to

= Direct labor hours × Manufacturing overhead rate

= 2,050 hours × $23

= $47,150