Big Thunder Co. incurred the following costs during April:
Raw materials purchased $99,225
Direct labor ($15 per hour) 123,750
Manufacturing overhead (actual) 303,175
Selling expenses 67,050
Administrative expenses 33,075
Interest expense 11,490
Manufacturing overhead is applied on the basis of $37.50 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year. During the month, 7,500 units of product were manufactured and 7,950 units of product were sold. On April 1 and April 30, Big Thunder Co. carried the following inventory balances:
April 1 April 30
Raw materials $ 41,160 $ 37,590
Work in process 111,720 119,640
Finished goods 88,000 56,320
(a) Prepare a statement of cost of goods manufactured for the month of April.
Big Thunder Co.
Statement of Cost of Goods Manufactured
For the month of April
Inventory April 1 $ 41160
Purchased During April 99225
Raw materials available for use $140,385
Less: Inventory, April 30 -37590
Cost of Materials Used $ 102795
Direct Labor Cost Incurred 123750
Manufacturing Overhead Applied ?????????
The manufacturing overhead applied is found for Big Thunder Co. An Excel file is used to outline the calculations.