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15 April, 04:45

Spruce Company uses a job costing system. Spruce Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31.

Cost of goods manufactured $124,100

Cost of direct materials used $42,800

Cost of direct labor ($36 per hour) $73,800

Work in process inventory, August 1 $15,200

Manufacturing overhead cost is allocated at the rate of $23 per direct labor hour.

What is the amount of allocated manufacturing overhead costs for August?

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  1. 15 April, 05:06
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    The amount of allocated manufacturing overhead costs for August is $47,150

    Explanation:

    For computing the allocated manufacturing overhead costs, first we have to compute the direct labor hours which is shown below:

    = Direct labor cost : per hour rate

    = $73,800 : $36

    = 2,050 hours

    Now the allocated manufacturing overhead costs equals to

    = Direct labor hours * Manufacturing overhead rate

    = 2,050 hours * $23

    = $47,150
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