Freeman Furnishings has summarized its data as shown. Direct labor hours will be used as the activity base to allocate overhead:Compute the cost of goods manufactured. Raw materials purchasedRaw materials, beginning inventoryRaw materials, ending inventoryWork in process, beginning inventoryWork in process, ending inventoryEstimated overhead$320,00015,00014,00035,00037,000300,00050,0007,38245,00020,00011,000100,00024,00025,000Depreciation of factory buildingFactory real estate taxesFactory utility expensesIndirect materialsIndirect laborDirect labor costDirect labor hours incurredEstimated direct labor hours

Managerial accounting is the branch of accounting used to generate reports for the purpose of…

Answered: Compute the cost of goods manufactured.

Business

Accounting

Compute the cost of goods manufactured.

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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Question

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Freeman Furnishings has summarized its data as shown. Direct labor hours will be used as the activity base to allocate overhead:

Compute the cost of goods manufactured.

Raw materials purchased
Raw materials, beginning inventory
Raw materials, ending inventory
Work in process, beginning inventory
Work in process, ending inventory
Estimated overhead
$320,000
15,000
14,000
35,000
37,000
300,000
50,000
7,382
45,000
20,000
11,000
100,000
24,000
25,000
Depreciation of factory building
Factory real estate taxes
Factory utility expenses
Indirect materials
Indirect labor
Direct labor cost
Direct labor hours incurred
Estimated direct labor hours

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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