Yarra Fabrication estimates that its manufacturing overhead will be $2,240,000 in year 1. It further estimates that
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Yarra Fabrication estimates that its manufacturing overhead will be $2,240,000 in year 1. It further estimates that direct material costs will amount to $1,400,000. Actual manufacturing overhead costs for the year were $2,400,000. Actual direct materials costs were $1,550,000. Manufacturing overhead is applied to jobs based on direct materials cost using predetermined rates. The total applied overhead for the year was $2,480,000.
The balance in each of the inventory accounts is as follows.
Work-in-process inventory$451,000Finished goods inventory$1,066,000Cost of goods sold$6,683,000
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