Reference no: EM1363460
Red Wing Company applies factory overhead based on direct labor costs. The company incurred the following costs during 2011: direct materials costs, $637,500; direct labor costs, $2,500,000; and factory overhead costs applied, $1,000,000.
1. Determine the company's predetermined overhead rate for year 2011.
2. Assuming that the company's $57,000 ending Goods in Process Inventory account for year 2011 had $18,000 of direct labor costs, determine the inventory's direct materials costs.
3. Assuming that the company's $337,485 ending Finished Goods Inventory account for year 2011 had $137,485 of direct materials costs, determine the inventory's direct labor costs and its overhead costs.
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