Question

Bills Bird House Bonanza

The following information relates to the manufacturing plant of Bills Bird House Bonanza:

Inventory Values                                           September1                September 30

Direct Materials for bird houses                    122,200                    115,500

Work In Progress of bird houses                    200,000                      225,500

Finished and Complete bird houses               140,400                      125,500

Production Data for the Month of September:

Direct Labor for bird house production                     275,500

Anticipated Actual Factory Overhead December 31             200,200

Direct Materials Purchased                                        234,400

Bills Bird House Bonanza uses one factory over-head account and applies factory overhead to production at 70% of direct labor cost. Over-and-Under applied overhead is not recognized until year-end.

Required:

What is the total manufacturing cost for month of September for Bills Bird House Bonanza?

Answer 1

A	B	C	D	E	F	G	H	I	J
2
3		Direct Materials used during September	=Beginning Inventory + Purchases - Ending Inventory
4			=$122,200 + $234,400 - $115,500
5			$241,100
6
7		Total manufacturing cost can be calculated as follows:
8		Direct Materials	$241,100
9		Direct Labor Cost	$275,500
10		Factory Overhead	$192,850	=D9*70%	(Overhead rate is 70% of direct labor cost)
11		Total manufacturing cost	$709,450	=SUM(D8:D10)
12
13		Hence total manufacturing cost for the month is	$709,450
14

Formula sheet

A	B	C	D	E	F	G	H	I	J
2
3		Direct Materials used during September	=Beginning Inventory + Purchases - Ending Inventory
4			=$122,200 + $234,400 - $115,500
5			=122200+234400-115500
6
7		Total manufacturing cost can be calculated as follows:
8		Direct Materials	=D5
9		Direct Labor Cost	275500
10		Factory Overhead	=D9*70%	=D9*70%	(Overhead rate is 70% of direct labor cost)
11		Total manufacturing cost	=SUM(D8:D10)	=SUM(D8:D10)
12
13		Hence total manufacturing cost for the month is	=D11
14