Spruce Company uses a job costing system. Spruce Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31.

Cost of goods manufactured $124,100

Cost of direct materials used $42,800

Cost of direct labor ($36 per hour) $73,800

Work in process inventory, August 1 $15,200

Manufacturing overhead cost is allocated at the rate of $23 per direct labor hour.

What is the amount of allocated manufacturing overhead costs for August?

Question

Aniyah

Business

30 May, 11:53

Spruce Company uses a job costing system. Spruce Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31.

Cost of goods manufactured $124,100

Cost of direct materials used $42,800

Cost of direct labor ($36 per hour) $73,800

Work in process inventory, August 1 $15,200

Manufacturing overhead cost is allocated at the rate of $23 per direct labor hour.

What is the amount of allocated manufacturing overhead costs for August?

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Answers (1)

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Arabella Ferguson · Answer 1

The amount of allocated manufacturing overhead costs for August is $47,150

Explanation:

For computing the allocated manufacturing overhead costs, first we have to compute the direct labor hours which is shown below:

= Direct labor cost : per hour rate

= $73,800 : $36

= 2,050 hours

Now the allocated manufacturing overhead costs equals to

= Direct labor hours * Manufacturing overhead rate

= 2,050 hours * $23

= $47,150