During 2013, tanner manufacturing expected job no. 26 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. tanner applied overhead based on direct labor cost. actual production required an overhead cost of $280,000, $550,000 in materials used, and $210,000 in labor. all of the goods were completed. what amount was transferred to finished goods?

Question

Mathematics

Carlo Escobar

7 February, 13:49

During 2013, tanner manufacturing expected job no. 26 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. tanner applied overhead based on direct labor cost. actual production required an overhead cost of $280,000, $550,000 in materials used, and $210,000 in labor. all of the goods were completed. what amount was transferred to finished goods?

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Lucia Daniel · Answer 1

You need to figure out your predetermined overhead rate. This is only done with the numbers you estimate. Since overhead is applied based off direct labor hours your rate is. 300,000 / 200,000 = 1.5.

When you eventually apply overhead the actual amount of overhead cost is irrelevant. Your end up applying 315,000 (1.5 * 210,000 direct labor dollars).

So 315,000 + 210,000 + 550,000 = 1,075,000 ... answer