Dacosta Corporation had only one job in process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hour. During May, the following activity was recorded:
Work in process inventory on May 30 contains $3,741 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.The cost of goods manufactured for May was:

A) $97,110
B) $110,600
C) $98,770
D) $100,535

Question

Dacosta Corporation had only one job in process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hour. During May, the following activity was recorded:

Work in process inventory on May 30 contains $3,741 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.The cost of goods manufactured for May was:

A) $97,110
B) $110,600
C) $98,770
D) $100,535

Alyssa Fuqua · Accepted Answer

Final Answer : D, Explanation :  To calculate the cost of goods manufactured, we need to add up all the costs incurred during the period and deduct the ending work in process inventory.Direct materials cost = $1,800Direct labor cost = $6,966Manufacturing overhead cost = $9,936Total manufacturing cost = $18,702The total direct labor hours worked during the period can be calculated by dividing the manufacturing overhead cost by the predetermined overhead rate:Total direct labor hours = $9,936 ÷ $18.40 per hour = 540 hoursWe can then calculate the total cost of goods started during the month by adding the beginning work in process inventory to the total manufacturing cost:Total cost of goods started = $18,702 + $0 = $18,702To calculate the cost of goods completed, we need to subtract the ending work in process inventory from the total cost of goods started:Cost of goods completed = $18,702 - $3,741 = $14,961Therefore, the cost of goods manufactured for May was $14,961. The closest answer choice to this amount is D) $100,535.

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