McAllister, Inc. employs a normal costing system. The following information pertains to the year just ended. • Total manufacturing costs were $2,500,000. • Cost of goods manufactured was $2,425,000. • Applied

Excerpt
1 was 75 percent of work-in-process inventory on December 31. Required : 1. Compute the total direct-labor cost for the year. 2. Calculate the total cost of direct material used during the year. 3. Compute the value of the company’s work-in-process inventory on December 31.

McAllister, Inc. employs a normal costing system. The following information pertains to the year just ended. • Total manufacturing costs were $2,500,000. • Cost of goods manufactured was $2,425,000. • Applied manufacturing overhead was 30 percent of total manufacturing costs. • Manufacturing overhead was applied to production at a rate of 80 percent of direct-labor cost. • Work-in-process inventory on January 1 was 75 percent of work-in-process inventory on December 31. Required : 1. Compute the total direct-labor cost for the year. 2. Calculate the total cost of direct material used during the year. 3. Compute the value of the company’s work-in-process inventory on December 31.

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