Reference no: EM132472135

Chop Shop Manufacturing Company makes specialty tools. In July, Chop Shop incurred manufacturing costs of $4,000,000 for direct materials, direct labour, and overhead. 30% of the total costs represents overhead applied. The overhead rate is $1 for every $0.50 of direct labour costs incurred.

Inventory balances were:

                                        July 1                July 31

Raw materials                       $100,000          $ 80,000

Work in process                        90,000             95,000

Finished goods                         120,000           130,000

Instructions

Question a) Determine the cost of raw materials purchased in July.

Question b) Prepare a cost of goods manufactured schedule for July 2016.