During 2013 DougCo expected Job No 26 to cost 490000 of mate

During 2013, DougCo expected Job No. 26 to cost $490,000 of materials, $400,000 in direct labor labor and overhead of $600,000 at its normal predetermined overhead rate. DougCo applies overhead based on direct labor cost. Actual costs relating to Job No. 26 were $280,000 in overhead, $535,000 in materials used, and $210,000 in direct labor. All of the goods were completed. What amount was transferred to Finished Goods?

Solution

Particulars Amount Direct material          5,35,000 Direct labor          2,10,000 Overhead applied          3,15,000 Cost of finished goods        10,60,000 Overhead applied a Estimated overhead          6,00,000 b Direct labor cost          4,00,000 c=a/b Overhead rate 1.5 d Actual direct labor          2,10,000 e= c*d Applied overhead          3,15,000