Question

E2-9 (Algo) Calculating Cost of Jobs (LO 2-4, 2-6) Manufacturing costs for Davenport Company during 2018 were as follows: $ Beginning Finished Goods, 1/1/18 Beginning Raw Materials, 1/1/18 Beginning Work in Process. 1/1/18 Direct Labor for 2018 Ending Finished Goods, 12/31/18 Ending Raw Materials, 12/31/18 Ending Work in Process, 12/31/18 Material Purchases for 2018 (including $19,000 of indirect material) 24,900 36. 300 111, 100 276,100 23, 200 40,650 121,400 305,000 Required: 1. Compute direct material used. 2. Compute applied overhead if the company applies overhead at a rate of 0.83 (83%) of direct labor cost. 3. Compute total manufacturing cost. 4. Compute cost of goods manufactured. 5. Compute cost of goods sold. 1. 2. 3. 4. 5. Direct Material Used Applied Overhead Total Manufacturing Cost Cost of Goods Manufactured Cost of Goods Sold

Answer 1

1.

Beginning raw materials	36,300
Materials purchased	305,000
Total materials available	341,300
Less: Indirect materials	- 19,000
Less: Ending raw materials	- 40,650
Direct materials used	$281,650

2.

Overhead applied = Direct labor cost x Overhead rate

= 276,100 x 83%

= $229,163

3.

Direct materials used	281,650
Direct labor	276,100
Overhead applied	229,163
Total manufacturing costs	$786,913

4.

Total manufacturing costs	786,913
Beginning work in process	111,100
Ending work in process	- 121,400
Cost of goods manufactured	$776,613

5.

Cost of goods manufactured	776,613
Finished goods, beginning	24,900
Cost of gods available for sale	801,513
Finished goods, ending	- 23,200
Cost of goods sold	$778,313

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