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Question - Hemingway, Inc. applies factory overhead based on direct labor costs. The company incurred the following costs during 2011: direct materials costs, $650,000; direct labor costs, $3 million; and factory overhead costs applied, $1,800,000.
A. Assuming that the company's $71,000 ending goods in process inventory account for 2011 had $20,000 of direct labor costs, determine the inventories direct material costs.
B. Determine the company's predetermined overhead rate for 2011.
C. Assuming that the company's $490,000 ending finished goods inventory account for 2011 had $250,000 of direct materials costs, determine the inventories direct labor costs and its overhead costs.
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