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Question: A manufacturer produces unique tapestries and bedding for hotel chains and uses a job order costing system. During the current month, the manufacturer purchased $50,000 of direct materials and incurred $22,000 in direct labor. Overhead is applied on the basis of direct labor hours at a rate of 60%. Overapplied or underapplied overhead is closed to cost of goods sold at the end of the period. The actual overhead incurred this month was $10,000. Balances in the manufacturer's inventory accounts are presented below.
Beginning of month End of month
Direct materials $2,000 $3,500
Work-in-process 5,000 9,000
Finished goods 2,500 1,700
What is the cost of goods manufactured this month?
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