Calfee Corporation is a manufacturer that uses job-order costing. The company ha

Question

Calfee Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: 13 Beginning inventories: $ 40,000 $ 19,000 2284Etimated total manufacturing overhead at the beginning of the year $595,000 Raw materials work in process 02:28:46 Estimated direct labor-hours at the beginning of the year 35,000 direct labor-hours Results of operations: Raw materials purchased on account Raw materials(all direct) requisitioned for use in production Direct labor cost Actual direct labor-hours Manufacturing overhead: 423,000 420,000 $ 641,000 33,000 direct labor-hours Indirect labor cost Other manufacturing overhead costs incurred $ 143,000 $ 531,000 $1,441,000 Cost of goods manufactured The ending balance in the Work in Process inventory account is: Multiple Choice $200,000 $162,000 220,000 $181,000

Explanation / Answer

Here, the applied overhead should be considered for cost of goods manufactured.

Applied overhead = Standard rate × Actual labor hours

                              = ($595,000 / 35,000) × 33,000

                              = $17 × 33,000

                              = $561,000

Now, by the formula of cost of goods manufactured—

Cost of goods manufactured = Material consumed + Actual labor cost + Applied overhead + Beginning work-in process – Ending work in process

1,441,000 = 420,000 + 641,000 + 561,000 + 19,000 – Ending work-in process

Ending work-in process = 420,000 + 641,000 + 561,000 + 19,000 – 1,441,000

                                        = $200,000

Answer: 1st option

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