Reference no: EM13750339

Arnold Corporation uses a job order costing system and applies manufacturing overhead using a predetermined overhead rate based on direct labor hours. The following data are available for August :

Inventory :

Raw Material : Beginning ; $42,000 Ending : $38,000

Work In Process : Beginning : $11,000 Ending : $17,000

Finished Goods : Beginning : $43,000 Ending : $47,000

Actual Costs For the Year :

Raw Material Purchased : $65,000

Direct Labor Salaries Paid : $80,000

Direct Labor Pay Rate Per Hour : $10

Manufacturing Overhead Incurred : $65,000

Information From Annual Budget :

Manufacturing Overhead Budgeted : $60,000

Direct Labor Hours Budgeted : 7,500

Question 1A) Compute the manufacturing cost for August :

A) $210,000 B) $205,000 C) $209,000 D) $213,000

Question 1B) For the same company above , assume (contrary to the fact) that the cost of goods manufactured for August is $200,000. The adjusted cost of goods sold (adjusting for the over or under applied amount all closed to cost of goods sold) that appears on income statement for August is?

A) 197,000 B) $191,000 C) $196,000 D) 195,000