Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 12

Applying Overhead Using a Predetermined Rate

Turco Products uses a job order cost system. The following debits (credits) appeared in Work-in- Process Inventory for September:

	Description	Amount
September 1	Balance	$ 70,200
For the month	Direct materials	421,200
For the month	Direct labor	262,600
For the month	Factory overhead	315,120
For the month	To finished goods	(832,000)

Turco applies overhead to production at a predetermined rate of 120 percent based on direct labor cost. Job 9-27, the only job still in process at the end of September, has been charged direct labor of $35,100.

Required

What cost amount of direct materials was charged to Job 9-27?

Step 1 of 6

Manufacturing overhead:

Manufacturing overhead is indirect cost related to manufacturing. All manufacturing cost other than direct material and direct labor are classified into manufacturing overhead. Example of manufacturing overhead is indirect material, indirect labor, fuel cost, factory utilities, factory rent, factory property taxes etc.