Under Eagle Co.'s job order costing system, manufacturing overhead is applied to Work-in-Process using a predetermined annual overhead rate. During February, Eagle's transactions included the following: Direct materials issued for production $ 96,000. Indirect materials issued for production 14,000. Manufacturing overhead incurred 131,000. Manufacturing overhead applied 119,000 Direct labor costs 113,000 Eagle had neither beginning nor ending inventory in Work-in-Process Inventory. What was the cost of jobs completed in February? (CPA adapted) A. 340,000 B. 328,000
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To determine the cost of jobs completed in February, you need to add all the costs associated with the work done in that month. In a job order costing system, the cost of a job includes direct materials, direct labor, and applied manufacturing overhead.
Here's the calculation for Eagle Co.:
1. Direct materials issued for production: $96,000
2. Direct labor costs: $113,000
3. Manufacturing overhead applied: $119,000
4. The sum of these costs will give you the total cost of jobs completed: Total cost = Direct Materials + Direct Labor + Applied Overhead Total cost
= $96,000 + $113,000 + $119,000
Total cost = $328,000
Therefore, the cost of jobs completed in February is $328,000, which corresponds to option B.