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Hacken Company has a job-order costing system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor cost. The information below has been taken from the cost records of Hacken Company for the past year:
Direct materials used in production
$1,250
Total manufacturing costs charged to production during the year (includes direct materials, direct labor, and applied factory overhead)
$6,050
Manufacturing overhead applied
$2,800
Selling and administrative expenses
$1,000
Inventories:
Direct materials, January 1
$130
Direct materials, December 31
$80
Work in process, January 1
$250
Work in process, December 31
$400
Finished goods, January 1
$300
Finished goods, December 31
$200
Required:
a. Compute the cost of direct materials purchased during the year.
b. Compute the predetermined overhead rate that was used during the past year.
c. Compute the Cost of Goods Manufactured for the past year.
d. Compute the Cost of Goods Sold for the past year.
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