Product Cost: The cost incurred on the production of a particular job or product is called product cost. The cost in production of a product usually involves raw material used, direct labor used and manufacturing overhead applied. It is recorded by debiting the work in process account for all the cost and crediting the raw material inventory account, wages payable account and manufacturing overhead. To determine : Computation of the following amounts for the month of May. 1. Cost of direct materials used. 2. Cost of direct labor used. 3. Cost of goods manufactured. 4. Cost of goods sold. 5. Gross profit 6. Overapplied or underapplied overhead.

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Chapter 19, Problem 7E

To determine

Product Cost:

The cost incurred on the production of a particular job or product is called product cost. The cost in production of a product usually involves raw material used, direct labor used and manufacturing overhead applied. It is recorded by debiting the work in process account for all the cost and crediting the raw material inventory account, wages payable account and manufacturing overhead.

To determine:

Computation of the following amounts for the month of May.

1. Cost of direct materials used.

2. Cost of direct labor used.

3. Cost of goods manufactured.

4. Cost of goods sold.

5. Gross profit

6. Overapplied or underapplied overhead.

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