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Adding Company applies overhead costs to products based on a pre-determined overhead rate of 80% of direct labor cost. During July, Adding Company reported the following inventory balances: July 1 $37,000 Direct materials Work in process Finished goods During July, Adding Company incurred the following costs: $ 46,000 $ 21,000 $297,000 $ 73,000 $ 35,000 $ 89,000 $306,000 $ 29,000 $285,000 $ 37,000 Sales commissions CEO's salary Advertising Depreciation, factory equipment Direct materials purchased Production supervisor's salary Indirect materials $54,000 $42,000 Rent Insurance, factory building. Direct labor Factory utilities Depreciation, copier in sales office July 31 $81,000 $26,000 $69,000 $ 22,000 $ 60,000 Forty-five percent of the rent relates to the factory while fifty-five percent of the rent relates to the administrative building. Calculate Adding Company's cost of goods manufactured for July.

Adding Company applies overhead costs to products based on a pre-determined overhead rate of 80% of direct labor cost. During July, Adding Company reported the following inventory balances: July 1 $37,000 Direct materials Work in process Finished goods During July, Adding Company incurred the following costs: $ 46,000 $ 21,000 $297,000 $ 73,000 $ 35,000 $ 89,000 $306,000 $ 29,000 $285,000 $ 37,000 Sales commissions CEO's salary Advertising Depreciation, factory equipment Direct materials purchased Production supervisor's salary Indirect materials $54,000 $42,000 Rent Insurance, factory building. Direct labor Factory utilities Depreciation, copier in sales office July 31 $81,000 $26,000 $69,000 $ 22,000 $ 60,000 Forty-five percent of the rent relates to the factory while fifty-five percent of the rent relates to the administrative building. Calculate Adding Company's cost of goods manufactured for July.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Adding Company applies overhead costs to products based on a pre-determined overhead rate of 80% of direct labor cost. During July, Adding Company reported the following inventory balances: July 1 $37,000 Direct materials Work in process Finished goods During July, Adding Company incurred the following costs: $ 46,000 $ 21,000 $297,000 $ 73,000 $ 35,000 $ 89,000 $306,000 $ 29,000 $285,000 $ 37,000 $ 22,000 $ 60,000 Sales commissions CEO's salary Advertising Depreciation, factory equipment Direct materials purchased Production supervisor's salary Indirect materials $54,000 $42,000 Rent Insurance, factory building. Direct labor Factory utilities Depreciation, copier in sales office July 31 $81,000 $26,000 $69,000 Forty-five percent of the rent relates to the factory while fifty-five percent of the rent relates to the administrative building. Calculate Adding Company's cost of goods manufactured for July.
Transcribed Image Text:Adding Company applies overhead costs to products based on a pre-determined overhead rate of 80% of direct labor cost. During July, Adding Company reported the following inventory balances: July 1 $37,000 Direct materials Work in process Finished goods During July, Adding Company incurred the following costs: $ 46,000 $ 21,000 $297,000 $ 73,000 $ 35,000 $ 89,000 $306,000 $ 29,000 $285,000 $ 37,000 $ 22,000 $ 60,000 Sales commissions CEO's salary Advertising Depreciation, factory equipment Direct materials purchased Production supervisor's salary Indirect materials $54,000 $42,000 Rent Insurance, factory building. Direct labor Factory utilities Depreciation, copier in sales office July 31 $81,000 $26,000 $69,000 Forty-five percent of the rent relates to the factory while fifty-five percent of the rent relates to the administrative building. Calculate Adding Company's cost of goods manufactured for July.
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