Concord, a coffee-mug producer, generally conducts over half of its business in the last month of...

 

Transcribed Image Text:

Concord, a coffee-mug producer, generally conducts over half of its business in the last month of the calendar year due to holiday sales. By the end of December, its fiscal year-end, Concord had accumulated Cost of Goods Sold in the amount of $251,000. Concord's business model is to maintain minimal WIP Inventory and FG Inventory, so these two accounts had balances of just $16.000 and $21,000, respectively, on December 31. Concord does hold a fair amount of RM Inventory, however, so it will be able to quickly fulfill its orders. As a result, its December 31RM Inventory (all direct materials) is $86,000. Concord utilizes a normal costing system, in its effort to have timely applied MOH information for each custom job, and its budgeted MOH rate is $2.26/direct labor hour. Budgeted MOH at the beginning of the year was $156,000; actual MOH costs incurred by the end of the year were $158,000. Actual direct labor hours used were 67,000. (a) Was Concord's MOH cost for the year under-or overapplied? By how much? MOH cost was M by $ 2 MECHI Concord, a coffee-mug producer, generally conducts over half of its business in the last month of the calendar year due to holiday sales. By the end of December, its fiscal year-end, Concord had accumulated Cost of Goods Sold in the amount of $251,000. Concord's business model is to maintain minimal WIP Inventory and FG Inventory, so these two accounts had balances of just $16.000 and $21,000, respectively, on December 31. Concord does hold a fair amount of RM Inventory, however, so it will be able to quickly fulfill its orders. As a result, its December 31RM Inventory (all direct materials) is $86,000. Concord utilizes a normal costing system, in its effort to have timely applied MOH information for each custom job, and its budgeted MOH rate is $2.26/direct labor hour. Budgeted MOH at the beginning of the year was $156,000; actual MOH costs incurred by the end of the year were $158,000. Actual direct labor hours used were 67,000. (a) Was Concord's MOH cost for the year under-or overapplied? By how much? MOH cost was M by $ 2 MECHI

Answer rating: 100% (QA)

a To determine whether Concords MOH cost for the year wa... View the full answer