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