The Overhead Allocation Rate in Frantz Company's Job Order Cost

question 135

Essay

The overhead allocation rate in Frantz Company's job order cost accounting system applies overhead based on direct labor costs. The company's manufacturing costs for the current year were: direct materials, $108,000; direct labor, $144,000; and factory overhead, $18,000. At year-end, the total cost of goods in process is $36,000, which includes $12,000 of direct labor cost. What amount of direct material cost is included in the ending goods in process inventory?

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Definitions:

Catabolism

The metabolic process that breaks down molecules in living organisms, releasing energy.

Cata-

A prefix in medical and general terminology meaning "down," "against," "back," or "deconstructive."

Self

Refers to the individual's sense of their own identity or personal being.

Sign

An objective evidence of disease perceivable by an examining physician, as opposed to a symptom, which is subjectively perceived by the patient.