Sterling's records show the work in process inventory had a beginning balance of $2,978 and an ending balance of $3,706. How much direct labor was incurred if the records also show: • Materials used $2,285 • Overhead applied $1,377 Cost of goods manufactured $6,587 E noiteou

Sterling's records show the work in process inventory had a beginning balance of $2,978 and an ending balance of $3,706. How much direct labor was incurred if the records also show: • Materials used $2,285 • Overhead applied $1,377 Cost of goods manufactured $6,587 E noiteou

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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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Sterling's records show the work in process inventory had a beginning
balance of $2,978 and an ending balance of $3,706. How much direct labor
was incurred if the records also show:
• Materials used $2,285
• Overhead applied $1,377
• Cost of goods manufactured $6,587
E noileeu
PAntaubol medmua

Expert Solution

Total manufacturing cost

Cost of goods manufactured	6,587
Add: work in process inventory at ending	3,706
Less: work in process inventory at beginning	- 2,978
Total manufacturing cost	7,315

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