Question

Reiver Inc makes paving materials for highways. Production and cost data for January 2018, the first month of operations are as follows: Units started in January 90,000 tons Units completed and transferred to finished goods 80,000 tons Machine hours operated 8000 Cost of direct materials $ 495,000 Cost of direct labor $ 393,550 All direct materials are added at the start of the process for every unit produced and the labor and manufacturing overhead are added evenly throughout the process. To apply manufacturing overhead, the rate of $25 per machine hour is used and the units still in process at the end of January 2018 were 50% completed. Prepare a cost of production report for Reiver Inc for January.

Answer 1