Meyers Corporation had the following inventory balances at the beginning and end of November:

Meyers Corporation had the following inventory balances at the beginning and end of November:

During November, $102,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company’s predetermined overhead rate was $5 per direct labor-hour, and it paid its direct labor workers $9 per hour. A total of 600 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $12,000 of direct materials cost. The Corporation incurred $72,000 of actual manufacturing overhead cost during the month and applied $66,000 in manufacturing overhead cost.

The direct materials cost in the November 1 Work in Process inventory account totaled:

  • $8,600
  • $11,600
  • $14,000
  • $5,400

Answer: $8,600

Rationale:

Beginning work in process inventory = Direct materials + Direct labor + Manufacturing overhead applied to work in process
Direct material = Beginning work in process inventory − Direct labor − Manufacturing overhead applied to work in process
Direct material = $17,000 − ($9 per direct labor-hour × 600 direct labor-hours) − ($5 per direct labor-hour × 600 direct labor-hours)
Direct material = $17,000 − $5,400 − $3,000 = $8,600

The actual direct labor-hours worked during November totaled: (Round your answers to the nearest dollar.)

  • 8,000 hours
  • 14,400 hours
  • 7,333 hours
  • 13,200 hours

Answer: 13,200 hours

Rationale:

Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred
Amount of the allocation base incurred = Overhead applied ÷ Predetermined overhead rate
Amount of the allocation base incurred = $66,000 ÷ $5 per direct labor-hour = 13,200 direct labor-hours

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