Question

In: Accounting

madtack Company’s beginning and ending inventories for the month of July are July 1 July 30...

madtack Company’s beginning and ending inventories for the month of July are

July 1

July 30

Direct materials

$ 67,000

$ 62,000

Work-in-process

145,000

171,000

Production data for the month of July follows:

Direct labor	$200,000
Direct materials purchased	163,000

Madtack has one overhead cost account and assigns overhead to production based on direct labor cost. The predetermined allocation rate is 0.7. The company formally reconciles over- or underapplied overhead at year end.

What are the costs of good manufactured for July?

Expert Solution

Direct materials used=Beginning Direct materials+Direct materials purchased-Ending Direct materials

=(67000+163,000-62000)=$168000

Total overhead=predetermined allocation rate*Actual direct labor

=(200,000*0.7)=$140,000

Total manufacturing cost=Direct materials used+Direct labor+Total overhead

=168,000+200,000+140,000

=$508000

Cost of goods manufactured=Beginning WIP+Total manufacturing cost-Ending WIP

=145,000+508,000-171,000

=$482000

ekkarill92 answered 2 years ago

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