At the Beginning of the Year,Berkshire Manufacturing Had the Following $\begin{array}{cc}\text {work in process inventory }\\\hline\begin{array}{ll|l}&2,000& \\\end{array}\end{array}$

question 126

Multiple Choice

At the beginning of the year,Berkshire Manufacturing had the following account balances: $\begin{array}{cc}\text {work in process inventory }\\\hline\begin{array}{ll|l}&2,000& \\\end{array}\end{array}$ $\begin{array}{cc}\text {Finished Goods Inventory }\\\hline\begin{array}{ll|l}&8,000& \\\end{array}\end{array}$ $\begin{array}{cc}\text { Manufacturing Overhead }\\\hline\begin{array}{ll|l}0& \\\end{array}\end{array}$ $\begin{array}{cc}\text { Cost of Goods Sold }\\\hline\begin{array}{ll|l}& 0\\\end{array}\end{array}$ $\begin{array}{cc}\text {Sales Revenue }\\\hline\begin{array}{ll|l}&&0 \\\end{array}\end{array}$ The following additional details are provided for the year:
$\begin{array}{|l|c|}\hline\text { Direct materials placed in production } & \$ 81,000 \\\hline \text { Direct labor incurred } & 190,000 \\\hline \text { Manufacturing overhead incurred } & 302,000 \\\hline \text { Manufacturing overhead allocated to production } & 293,000 \\\hline \text { Cost of jobs completed and transferred } & 506,000 \\\hline \text { Total revenue } & 751,000 \\\hline \text { Cost of goods sold (before adjustment) } & 444,400\\\hline\end{array}$ Calculate the gross profit Berkshire will report for the year.

• A)$245,000
• B)$297,600
• C)$306,600
• D)$453,400

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Definitions:

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, calculated before the period begins based on estimated costs and activity levels.

Machine-Hour

A unit of measure representing the operation of a machine for one hour.

Unit Product Cost

The cost associated with producing a single unit of a product, encompassing materials, labor, and overhead.

Job K818

Specific reference to a job or project, indicating a unique identifier within a production or manufacturing setting.