Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 65% of...
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Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 65% of direct labor cost. Any underapplied or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company: Raw materials (all direct materials): Purchased during the month $15,000 Used in production $14,000 Labor: Direct labor hours worked during the month 1,300 Direct labor cost incurred $25,900 Indirect labor cost incurred $7,800 Manufacturing overhead costs incurred (total) $19,200 Inventories: Raw materials (all direct) August 31 $8,200 Work in process, August 1 $9,400 Work in process, August 31* $13,800 *contains $5,500 of direct labor cost 1)The amount of direct materials cost in the August 31 Work in Process inventory account was: 2) The entry to dispose of the underapplied or overapplied overhead cost for the month would include: 3) The balance on August 1 in the Raw Materials inventory account was
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