Problem 3-48 Job-Order Costing; Focus on Overhead and Cost Drivers (LO 3-2, 3-4, 3-5, 3-7)

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Garcia, Inc., uses a job-order costing system for its products, which pass from the Machining Department, to the Assembly Department, to finished-goods inventory. The Machining Department is heavily automated; in contrast, the Assembly Department performs a number of manual-assembly activities. The company applies manufacturing overhead using machine hours in the Machining Department and direct-labor cost in the Assembly Department. The following information relates to the year just ended:

Machining DepartmentAssembly DepartmentBudgeted manufacturing overhead$4,000,000$3,024,000Actual manufacturing overhead4,270,0003,040,000Budgeted direct-labor cost

(based on practical capacity)1,500,0005,600,000Actual direct-labor cost1,450,0005,780,000Budgeted machine hours

(based on practical capacity)400,000100,000Actual machine hours425,000110,000

The data that follow pertain to job no. 775, the only job in production at year-end.

Machining DepartmentAssembly DepartmentDirect material$25,500$6,800Direct labor$27,800$58,600Machine hours360150

Selling and administrative expense amounted to $2,500,000.

2.Compute the cost of the company's year-end work-in-process inventory.