Heintz Company's job order costing system applies overhead based on direct labor costs. The company's manufacturing costs for the current year were: direct materials, $108,000; direct labor, $144,000; and factory overhead, $36,000. At year-end, the total cost of Work in Process is $38,000, which includes $12,000 of direct labor cost. What amount of direct material cost is included in the ending Work in Process inventory?
What will be an ideal response?
| Direct labor in work in process inventory ……………………. | $12,000 |
| Factory overhead in work in process inventory ($12,000 ? . 25) | 3,000 |
| Total factory overhead and direct labor ……………………….. | 15,000 |
| ? | ? |
| Total cost in work in process inventory ………………………. | $38,000 |
| Factory overhead and direct labor ……..………………………. | 15,000 |
| Direct materials …………………….…………………………… | $23,000 |
| Overhead rate = $36,000/$144,000 = .25% | ? |
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What will be an ideal response?
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