AAA Inc
Subject:AccountingPrice:2.84 Bought3
AAA Inc. has provided the following data for the month of August. The balance in the Work in Process inventory account was Rs. 30,000 at the beginning of the month and Rs. 15,000 at the end of the month. During the month, the Corporation incurred a direct materials cost of Rs. 70,000 and direct labor cost of Rs. 45,000. The actual manufacturing overhead cost incurred was Rs. 70,000. The manufacturing overhead cost applied to Work in Process was Rs. 71,000. The cost of goods manufactured for August was:
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Direct Material - 70,000
Direct Labor - 45,000
Manufacturing overhead Applied - 71,000
Total Manufacturing costs = 186,000
(+) Opening WIP - 30,000
(-) Closing WIP - (15,000)
Cost of goods Manufactured - 201,000
Where
Overapplied overhead = Applied - Actual
= 71,000-70,000
= 1000
Under or over applied overhead is adjusted to cost of goods sold.
Entry
Manufacturing overhead Debit 1000
Cost of goods sold. Credit. 1000
