McAllister, Inc. employs a normal costing system. The following information pertains to the year just ended.• Total manufacturing costs were $2,500,000.• Cost of goods manufactured was $2,425,000.• Applied manufacturing overhead was 30 percent of total manufacturing costs.• Manufacturing overhead was applied to production at a rate of 80 percent of direct-labor cost.• Work-in-process inventory on January 1 was 75 percent of work-in-process inventory on December 31.Required:1. Compute the total direct-labor cost for the year.2. Calculate the total cost of direct material used during the year.3. Compute the value of the company’s work-in-process inventory on December 31.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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McAllister, Inc. employs a normal costing system. The following information pertains to the year just ended.
• Total manufacturing costs were $2,500,000.
• Cost of goods manufactured was $2,425,000.
• Applied manufacturing overhead was 30 percent of total manufacturing costs.
• Manufacturing overhead was applied to production at a rate of 80 percent of direct-labor cost.
• Work-in-process inventory on January 1 was 75 percent of work-in-process inventory on December 31.
Required:
1. Compute the total direct-labor cost for the year.
2. Calculate the total cost of direct material used during the year.
3. Compute the value of the company’s work-in-process inventory on December 31.

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