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Summit Company: Direct Labor Cost; Bus Company: Cost of Goods Sold

Question 14:

Summit Company has provided the following inventory balances and manufacturing cost data for the month of January:

Inventories January 1 January 31
Direct materials $26,000 $36,000
Work in process $24,000 $29,000
Finished goods $68,000 $53,000

Month of January
Cost of goods manufactured $597,000
Manufacturing overhead applied $140,000
Direct materials used $180,000
Actual manufacturing overhead $152,000

Under Summit's job-order costing system, any over or underapplied overhead is closed to the Cost of Goods Sold account at the end of the calendar year (i.e., December 31).

How much direct labor cost was incurred during January?

$282,000

$288,000

$272,000

$277,000

Question 15:

The Bus Company uses a job-order costing system. The following information was recorded for September:

Cost Added During September
Job Number September 1 Inventory Direct Materials Direct Labor
1 $1,450 $280 $210
2 $1,850 $230 $310
3 $900 $1,700 $160
4 $1,150 $4,700 $410

The direct labor wage rate is $10 per hour. Overhead is applied at the rate of $5 per direct labor-hour. Jobs 1, 2, and 3 have been completed and transferred to finished goods. Job 2 has been delivered to the customer.

The Cost of Goods Sold for September (before disposition of any underapplied or overapplied overhead) is:

$2,395
$4,145
$2,545
$6,370

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Question 14:

Summit Company has provided the following inventory balances and manufacturing cost data for the month of January:

Inventories January 1 January 31
Direct materials $26,000 $36,000
Work in process $24,000 $29,000
Finished goods $68,000 $53,000

Month of January
Cost of goods manufactured $597,000
Manufacturing overhead applied $140,000
Direct materials used $180,000
Actual manufacturing overhead $152,000

Under Summit's job-order costing system, any over or underapplied overhead is ...

Solution Summary

This solution explains to determine how much direct labor cost was incurred during January for Summit and what is the cost of goods sold for Bus Company with calculations and answers.

$2.19