Question

Mulligan Manufacturing Company uses a job order cost system with overhead applied to products at a rate of 150 percent of direct labor cost. Required: Treating each case independently, selected from the manufacturing data given below, find the missing amounts. You should do them in the order listed. (Hint: For the manufacturing costs in Case 3, first solve for conversion costs and then determine how much of that is direct labor and how much is manufacturing overhead.) (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Enter all amounts as positive values.) Case 1 Case 2 Case 3 Direct material used 14,400 12,000 16,000 Direct labor 12,000 24,500 31,800 7,700 9,000 5,700 Manufacturing overhead applied Total current manufacturing costs Beginning work in process inventory Ending work in process inventory Cost of goods manufactured Beginning finished goods inventory Ending finished goods inventory Cost of goods sold 8,900 41,000 11,600 11,001 4,000 8,900 6,700 43,000 37,000

Answer 1

Case 1

Manufacturing overhead applied = Direct labor * Overead applied rate

= $16,000 * 150%

= $24,000

Total current manufacturing costs = Direct materials + Direct labor + Manufacturing overhead applied

= $12,000 + $16,000 + $24,000

= $52,000

Cost of goods manufactured = Total current manufacturing costs + Beginning work in process inventory - Ending work in process inventory

= $52,000 + $9,000 - $5,700

= $55,300

Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory

= $55,300 + $4,000 - $8,900

= $50,400

Case 2

Manufacturing overhead applied = Direct labor * Overead applied rate

$12,000 = Direct labor * 150%

Direct labor = $8,000

Total current manufacturing costs = Direct materials + Direct labor + Manufacturing overhead applied

$24,500 = Direct materials + $8,000 + $12,000

Direct materials = $4,500

Cost of goods manufactured = Total current manufacturing costs + Beginning work in process inventory - Ending work in process inventory

$41,000 = $24,500 + Beginning work in process inventory - $8,900

Beginning work in process inventory = $25,400

Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory

$37,000 = $41,000 + $11,600 - Ending finished goods inventory

Ending finished goods inventory = $15,600

Case 3

Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory

$43,000 = $11,001 + Beginning finished goods inventory - $6,700

Beginning finished goods inventory = $38,699

Cost of goods manufactured = Total current manufacturing costs + Beginning work in process inventory - Ending work in process inventory

$11,001 = $31,800 + $7,700 - Ending work in process inventory

Ending work in process inventory = $28,449

Let direct labor cost = x

Manufacturing overhead applied = 1.5x

Total current manufacturing costs = Direct materials + Direct labor + Manufacturing overhead applied

$31,800 = $14,400 + x + 1.5x

$17,400 = 2.5x

x = $6,960

Direct labor cost = $6,960

Manufacturing overhead applied = $6,960 * 1.5

= $10,440