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Fact Pattern: Hamilton Company uses job-order costing. Manufacturing overhead is applied to production at a predetermined rate of 150% of direct labor cost. Any over-
Fact Pattern:Hamilton Company uses job-order costing. Manufacturing overhead is applied to production at a predetermined rate of 150% of direct labor cost. Any over- or underapplied overhead is closed to the cost of goods sold account at the end of each month. Additional information is available as follows:
- Job 101 was the only job in process at January 31, with accumulated costs as follows:
Direct materials
$4,000
Direct labor
2,000
Applied manufacturing overhead
3,000
Total manufacturing costs
$9,000
- Jobs 102, 103, and 104 were started during February.
- Direct materials requisitions for February totaled $26,000.
- Direct labor cost of $20,000 was incurred for February.
- Actual manufacturing overhead was $32,000 for February.
- The only job still in process on February 28 was Job 104, with costs of $2,800 for direct materials and $1,800 for direct labor.
The cost of goods manufactured for February was
A) $78,000
B) $77,700
C) $85,000
D) $79,700
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