Problem
Rexford Company manufactures finger splints for kids who get tendonitis from playing video games. The firm had the following inventories at the beginning and end of the month of January.
January 1 January 31
Finished goods $125,000 $117,000
Work in process 233,000 251,000
Raw material 134,000 124,000
The following additional manufacturing data pertains to January operations.
Raw material purchased $190,000
Direct labor 350,000
Actual manufacturing overhead 165,000
Actual selling and administrative expenses 115,000
Rexford Company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year.
What are the prime costs, manufacturing costs, cost of good manufactured, and cost of goods sold? Not sure where and when to use the 60 percent.