Question

Rio Manufacturing Company uses a job order cost system. At the beginning of February, Rio only had one job in process, Job #594. The direct costs assigned to this job at that time were P800 of materials and P650 of labor. Job #594 was finished during February incurring additional direct costs of P120 for materials and P370 for labor. Job #595 was started and finished during February. The direct costs assigned to this job were P310 for materials and P190 for labor. Job #596 was started during February but was not finished by the end of the month. The direct costs assigned to this job were P740 for materials and P300 for labor. Rio applies manufacturing overhead to its products at a rate of 200% of direct labor cost. What is Rio's cost of goods manufactured for February?

Answer 1

1]	The cost of jobs are calculated in the table below:
		Job 594	Job 595	Job 596
	Beginning WIP inventory cost:
	Materials	800	0	0
	Labor	650	0	0
	Overhead assigned	1300	0	0
	Total	2750
	Costs incurred during the month:
	Materials	120	310	740
	Labor	370	190	300
	Overhead assigned	740	380	600
	Total costs during the month	1230	880	1640
	Total costs todate	3980	880	1640
2]	Status of completion	Completed	Completed	In progress
3]	Cost of goods manufactured during february = Cost Job 594+Cost of Job 595 = 3980+880 =	4860