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Bravo Company uses a predetermined overhead rate to apply manufacturing overhead to production. The rate is based on direct labor hours. Beginning of the year estimates for the year just ended were as follows:
Estimated manufacturing overhead
$240,000
Estimated direct labor hours
40,000
During the year, Bravo used a total of 37,000 direct labor hours. At the end of the year, Bravos records revealed the following information:
Raw materials inventory
$ 35,000
Work in process inventory
60,000
Finished goods inventory
105,000
Cost of goods sold
400,000
Manufacturing overhead costs incurred
210,000
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