Question

During 2012, Alvarez Manufacturing expected Job No. 26 to cost $336,000 in overhead, $400,000 in direct materials, and $240,000 in direct labor. Alvarez used direct labor cost as the activity base. Actual production required $840,000 of overhead, $825,000 of direct materials, and $330,000 of direct labor. Upon completion of the job, the amount transferred to Finished Goods is Select one: a. $1,617,000. b. $1,491,000. c. $ 976,000. d. $1,206,000. e. not able to be determined from the provided information.

Answer 1

Amount transfer to finished goods is $1617000

So option (a) is correct answer

Step-by-step explanation:

We have given expected values of cost.

Overhead cost = $336000

Direct material cost = $400000

Direct labor cost = $240000

And actual value of cost

Over head cost = $840000

Direct material cost = $825000

Direct labor cost = $330000

Overhead is equal to
`=(336000)/(240000)* 330000=462000`

Therefore amount transfer to finished goods = $825000+$330000+$462000 = $1617000

So option (a) is correct