Question

Rogers Inc. has provided the following data for the month of June. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

Work in process Finished goods Cost of goods sold Total
Direct materials $2,380 16790 43930 $63,100
Direct labor 1710 16060 42020 $59,790
Manufacturing overhead applied 1520 9880 26600 $38,000
Total $5,610 $42,730 $112,550 $160,890

Manufacturing overhead for the month was underapplied by $1,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The work in process inventory at the end of June after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

a. $5,570
b. $5,575
c. $5,645
d.$5,650

Answer 1

d.$5,650

Step-by-step explanation:

Rogers Inc.

Work in process Finished goods Cost of goods sold Total

Direct materials $2,380 16790 43930 $63,100

Direct labor 1710 16060 42020 $59,790

Manufacturing overhead

Applied 1520 9880 26600 $38,000

% OF OH Applied 1520/38000 9880/38000 26600 /38000

4% 26% 70%

Total $5,610 $42,730 $112,550 $160,890

Under applied 4% of 1000 26% of 1000 70% of 1000

Under applied 40 260 700

Total $ 5650 42990 113250

We find the percentage of the manufacturing overhead applied and multiply it with the under applied amount. Then we add the underapplied amount to the total to get the actual amount.