Question

During 2013, DougCo expected Job No. 26 to cost $490,000 of materials, $400,000 in direct labor labor and overhead of $600,000 at its normal predetermined overhead rate. DougCo applies overhead based on direct labor cost. Actual costs relating to Job No. 26 were $280,000 in overhead, $535,000 in materials used, and $210,000 in direct labor. All of the goods were completed. What amount was transferred to Finished Goods?

Answer 1

	Particulars	Amount
	Direct material	5,35,000
	Direct labor	2,10,000
	Overhead applied	3,15,000
	Cost of finished goods	10,60,000
	Overhead applied
a	Estimated overhead	6,00,000
b	Direct labor cost	4,00,000
c=a/b	Overhead rate	1.5
d	Actual direct labor	2,10,000
e= c*d	Applied overhead	3,15,000