Dillon Corporation applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any under or overapplied manufacturing overhead cost is closed out to Cost of Goods Sold at the end of the month. During May, the following transactions were recorded by the company:

Raw materials (all direct materials):
Purchased during the month	$38,000
Used in production	$35,000
Labor:
Direct labor-hours worked during the month	3,150
Direct labor cost incurred	$30,000
Manufacturing overhead cost Incurred (total)	$24,500
Inventories:
Raw materials (all direct), May 31	$8,000
Work in process, May 1	$9,000
Work in process, May 31	$12,000

Contains $4,400 indirect labor cost.

The Cost of Goods Manufactured for May was:

a. $84,500

b. $95,000

c. $75,500

d. $81,500

Answer rating: 100% (QA)

Answer 1 Manufacturing overhead applied 75 of Direct labor cost ... View the full answer