Mcie Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year:?Beginning inventories:???Raw materials$33,000??Work in process$20,000??Finished goods$35,000??Estimated total manufacturing overhead at the beginning of the year$567,000??Estimated direct labor-hours at the beginning of the year36,000direct labor-hoursResults of operations:?Raw materials purchased on account$497,000??Raw materials (all direct) requisitioned for use in production$452,000??Direct labor cost$591,000??Actual direct labor-hours45,000direct labor-hours?Manufacturing overhead:???Indirect labor cost$124,000??Other manufacturing overhead costs incurred$598,000??Cost of goods
manufactured$1,557,000?Required:a. What is the ending balance in Raw Materials?b. What is the ending balance in Work in Process?
What will be an ideal response?
a. The ending balance in Raw Materials is computed as follows:
*33,000 + 497,000 ? 452,000 = 78,000
b. The ending balance in Work in Process is computed as follows:
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base
= $567,000 ÷ 36,000 direct labor-hours = $15.75 per direct labor-hour
Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred
= $15.75 per direct labor-hour × 45,000 direct labor-hours = $708,750
*20,000 + (452,000 + 591,000 + 708,750) ? 1,557,000 = 20,000 + (1,751,750) ? 1,557,000 = 214,750
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