Question

Dacosta Corporation had only one job in process on May 1. The job had been charged with $1,850 of direct materials, $6,990 of direct labor, and $9,950 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.50 per direct labor-hour. During May, the following activity was recorded: Raw materials (all direct materials): Beginning balance $ 8,550 Purchased during the month $ 38,050 Used in production $ 39,350 Labor: Direct labor-hours worked during the month 1,950 Direct labor cost incurred $ 24,560 Actual manufacturing overhead costs incurred $ 33,350 Inventories: Raw materials, May 30 ? Work in process, May 30 $ 16,950 Work in process inventory on May 30 contains $3,750 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The cost of goods manufactured for May was:

Answer 1

$101,825

Step-by-step explanation:

We know,

The cost of goods manufactured = Beginning work-in-process + Total manufacturing costs - Ending work-in-process

Therefore, we have to find the total manufacturing costs at first.

Dacosta Corporation

The cost of production

For the month ended May 31, 20XX

Direct Materials used in production $39,350

Direct labor 24,560

Manufacturing overhead (1) 36,075

Total manufacturing costs $99,985

Add: Beginning work-in-process (2) 18,790

Less: Ending work-in-process (16,950)

Cost of goods manufactured $101,825

Note: (1) Manufacturing overhead = Predetermined overhead head rate x direct labor hour = $18.50 x 1,950 labor hours = $36,075

(2) Beginning work-in-process = Beginning (direct materials + direct labor + manufacturing overhead) = $1,850 + $6,990 + $9,950 = $18,790