Enzo Design Corporation reports the following cost information for March: $$\begin{array} { | l | r | }
\hline \text { Cost of Goods Manufactured } & \$ 75,000 \
\hline \text { Finished Goods Inventory, March 1 } & 4000 \
\hline \text { Finished Goods Inventory, March 31 } & 2650 \
\hline \text { Work-in-Process Inventory, March 1 } & 9670 \
\hline \text { Work-in-Process Inventory, March 31 } & 1000 \
\hline \text { Direct Labor } & 36,000 \
\hline \text { Direct Materials Used } & 16,900 \
\hline
\end{array}$$ What is the amount of manufacturing overhead incurred by the company in March?
A) $30,330
B) $138,570
C) $13,430
D) $12,430

Question

Enzo Design Corporation reports the following cost information for March: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 75,000 \
\hline \text { Finished Goods Inventory, March 1 } & 4000 \
\hline \text { Finished Goods Inventory, March 31 } & 2650 \
\hline \text { Work-in-Process Inventory, March 1 } & 9670 \
\hline \text { Work-in-Process Inventory, March 31 } & 1000 \
\hline \text { Direct Labor } & 36,000 \
\hline \text { Direct Materials Used } & 16,900 \
\hline
\end{array}$$ What is the amount of manufacturing overhead incurred by the company in March?
A) $30,330
B) $138,570
C) $13,430
D) $12,430

Quizplus · Accepted Answer

Manufacturing overhead is calculated as the total manufacturing costs minus direct labor and direct materials used. Total manufacturing costs include the Cost of Goods Manufactured plus the change in Work-in-Process Inventory. The calculation is as follows: Cost of Goods Manufactured ($75,000) + Ending Work-in-Process ($1,000) - Beginning Work-in-Process ($9,670) = $66,330 (Total Manufacturing Costs). Subtract Direct Labor ($36,000) and Direct Materials Used ($16,900) from this amount to get the Manufacturing Overhead: $66,330 - $36,000 - $16,900 = $13,430.

Enzo Design Corporation Reports the Following Cost Information for March