6. Meyers Corporation had the following inventory balances at the beginning and
ID: 2485171 • Letter: 6
Question
6. Meyers Corporation had the following inventory balances at the beginning and end of November:
November 1
November 30
Raw Materials
$
80,000
$
28,000
Finished Goods
$
220,000
$
150,000
Work in Process
$
46,000
$
50,000
During November, $170,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $9 per direct labor-hour, and it paid its direct labor workers $14 per hour. A total of 1,000 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $20,000 of direct materials cost. The Corporation incurred $120,000 of actual manufacturing overhead cost during the month and applied $110,000 in manufacturing overhead cost.
The actual direct labor-hours worked during November totaled: (Round your answers.)
8,571 hours
7,857 hours
13,333 hours
12,222 hours
November 1
November 30
Raw Materials
$
80,000
$
28,000
Finished Goods
$
220,000
$
150,000
Work in Process
$
46,000
$
50,000
Explanation / Answer
Predetermined overhead rate = $9 / direct labour hour.
Applied overhead is calculated by the following formula:
Actual labour hours worked during the period x predetermined overhead rate.
Applied manufacturing overhead cost = $110000
Actual labour hours worked during the month of November
= $110000 / $9 per direct labour hour
= 12222 hours.
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