Stone Cliff Company manufactures custom-order furniture. During 2013, actual man

Question

Stone Cliff Company manufactures custom-order furniture. During 2013, actual manufacturing overhead totaled $720,000. Based on the 2013 results, and projected production for 2014, management prepared the 2014 budget and estimated that manufacturing overhead would total $800,000. The estimated number of direct labor hours for 2014 is 500,000, and the estimated amount of direct labor cost is $1,000,000. The company plans to use direct labor hours as the basis to allocate overhead to jobs. During May and June 2014, employees worked on the following four j obs Job X87 Job Z22 Job A33 Monthly data May ob X43 Direct materials Direct labor cost Direct labor hours 5,050 $86,000 $101,000 $72,000 $91,000 4,550 $44,000 $78,000 3,900 $38,000 $52,000 2,600 June Direct materials Direct labor cost Direct labor hours $24,000 $28,000 1,400 $41,000 $52,000 2,600 $35,000 $62,000 3,100 $24,000 $32,800 1,640 All jobs were started in May. Jobs X87 and A33 were completed and delivered to customers during June. What was the balance of the work in process inventory account on June 30? $458,000 $156,200 O $479,520 $465,200

Explanation / Answer

Predetermine overhead rate = 800000/500000 = 1.6 per labour hour

Work in process balance = (249320+230200) = 479520

so answer is c) $479520

Job X43 Job Z22 Direct material 110000 79000 Direct labour 129000 140000 Manufacturing overhead applied (6450*1.60) = 10320 (7000*1.6) = 11200 Total cost 249320 230200

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