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Use the information below to answer the two questions that follow. A company applies manufacturing overhead to jobs using a predetermined overhead rate of 55% of direct labor cost. During January the company recorded the following: Used Raw Materials (all direct) Purchased $38,000 Hours Direct Labor (actual) Cost $36,000 1,865 Actual MOH incurred $22,200 Selected inventory balances for the period were: Jan 1 Raw Materials Work in Process Finished Goods $4,500 6,500 38,000 Jan 31 $6,000 8,200 29,000 Q. January unadjusted Cost of Goods Sold would be: ANS $
Purchased $38.000 Used Raw Materials (all direct) ? Hours Direct Labor (actual) 1,865 Cost $36,000 Actual MOH incurred $22,200 Selected Inventory balances for the period were: Raw Materials Work in Process Finished Goods Jan 1 $4,500 6,500 38,000 Jan 31 $6,000 8,200 29,000 Q. January unadjusted Cost of Goods Sold would be: ANS. Q. If company has a policy to close any under-or over-applied overhead costs to cost of goods sold at the end of the year, what would be the impact of this adjustment on the company's net operating income? ANS (Click to select) by $
Q. In January, a company incurred a total product cost of $135,000. Conversion costs were 50% of overall product costs, while prime costs were 80% of overall product costs. How much are direct labor costs? ANS. $