Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 67

Moonrise Bakery applies factory overhead based on direct labor costs. The company incurred the following costs during 2015: direct materials costs, $650,000; direct labor costs, $3,000,000; and factory overhead costs applied, $1,800,000.
1. Determine the company's predetermined overhead rate for 2015.
2. Assuming that the company's $71,000 ending Work in Process Inventory account for 2015 had $20,000 of direct labor costs, determine the inventory's direct materials costs.
3. Assuming that the company's $490,000 ending Finished Goods Inventory account for 2015 had $250,000 of direct materials costs, determine the inventory's direct labor costs and its overhead costs.