Question

Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is the same. (Round overhead rate to 2 decimal places, eg. 15.25 and final answers to decimal places, eg. 5,275.) Case A Case B Case C Direct materials used $ (a) $87,000 $63,150 53,000 Direct labor 147,800 (h) 42,400 (d) 0 155,750 (e) 213,000 22.100 18,800 (b) Manufacturing overhead applied Total manufacturing costs Work in process 1/1/20 Total cost of work in process Work in process 12/31/20 Cost of goods manufactured 205,300 (6) 0 (c) 12.900 (k) 194,200 (8) 228,300

Answer 1

Case A

Manufacturing overhead applied = Direct labor cost x 80%

42,400 = 53,000 x Predetermined overhead rate

Predetermined overhead rate = 80% of direct labor cost

Total manufacturing cost = Direct materials used + Direct labor + Manufacturing overhead applied

155,750 = Direct materials used + 53,000+42,400

Direct materials used = $60,350

Total cost of work in process = Total manufacturing cost+ Work in process 1/1/20

205,300 = 155,750+Work in process 1/1/20

Work in process 1/1/20 = 205,300-155,750

= $49,550

Cost of goods manufactured = Total cost of work in process - Work in process 12/31/20

194,200 = 205,300- Work in process 12/31/20

Work in process 12/31/20 = $11,100

Case B

Manufacturing overhead applied = Direct labor cost x 80%

= 147,800 x 80%

= $118,240

Total manufacturing cost = Direct materials used + Direct labor + Manufacturing overhead applied

= 87,000+147,800+118,240

= $353,040

Total cost of work in process = Total manufacturing cost+ Work in process 1/1/20

= 353,040+22,100

= $375,140

Cost of goods manufactured = Total cost of work in process - Work in process 12/31/20

= 375,140-12,900

= $362,240

Case C

Let the direct labor cost be $K

Manufacturing overhead applied = Direct labor cost x Predetermined overhead rate

= K x 80%

= 0.8K

Direct materials+ Direct labor + Overhead applied = Total manufacturing cost

63,150+K+0.8K = 213,000

1.8K = 213,000-63,150

1.8K= 149,850

K = $83,250

Direct labor cost = $83,250

Total manufacturing cost = Direct materials used + Direct labor + Manufacturing overhead applied

213,000 = 63,150+83,250+Manufacturing overhead applied

Manufacturing overhead applied = $66,600

Total cost of work in process = Total manufacturing cost+ Work in process 1/1/20

= 213,000+18,800

= $231,800

Cost of goods manufactured = Total cost of work in process - Work in process 12/31/20

228,300 = 231,800-Work in process 12/31/20

Work in process 12/31/20 = $3,500

	Case A	Case B	Case C
Direct materials used	60,350	87,000	63,150
Direct labor	53,000	147,800	83,250
Manufacturing overhead applied	42,400	118,240	66,600
Total manufacturing cost	155,750	353,040	213,000
Work in process 1/1/20	49,550	22,100	18,800
Total cost of worn in process	205,300	375,140	231,800
Work in process 12/31/20	11,100	12,900	3,500
Cost of goods manufactured	194,200	362,240	228,300

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