Question

E2-6 (Algo) Finding Unknown Values in the Cost of Goods Manufactured Report (LO 2-3, 2-6) 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 2 Case 3 Case 1 18.000 17 000 12600 11,000 25,000 30.600 R. 700 Direct material used Direct labor 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 9,900 47000 11.100 40.000 39.000 < Prev 2 of 3 III Next >

Answer 1

Complete the table as follows:

1	B	C	D	E
2		Case 1	Case 2	Case 3
3	Direct material used	18000	6667	12600
4	Direct labor	17000	7333	7200
5	Manufacturing overhead applied	25500	11000	10800
6	Total current manufacturing costs	60500	25000	30600
7	Beginning work in process inventory	8700	31900	8800
8	Ending work in process inventory	4700	9900	37399
9	Cost of goods manufactured	64500	47000	2001
10	Beginning finished goods inventory	4900	11100	43599
11	Ending finished goods inventory	7200	18100	6600
12	Cost of goods sold	62200	40000	39000

Working notes:

1.

Prepare the above table with the formulae as follows:

1	B	C	D	E
2		Case 1	Case 2	Case 3
3	Direct material used	18000	=D6-D5-D4	12600
4	Direct labor	17000	=D5/150*100	7200
5	Manufacturing overhead applied	=17000*150%	11000	10800
6	Total current manufacturing costs	=C3+ C4+C5	25000	30600
7	Beginning work in process inventory	8700	=D9+D8-D6	8800
8	Ending work in process inventory	4700	9900	=E6+E7-E9
9	Cost of goods manufactured	=C6+C7-C8	47000	2001
10	Beginning finished goods inventory	4900	11100	=E12+E11-E9
11	Ending finished goods inventory	7200	=D9+D10-D12	6600
12	Cost of goods sold	=C9+C10-C11	40000	39000

2.

Under case 3 direct labor and manufacturing overhead applied is calculated as follows:

Let direct labor be x.

Manufacturing overhead applied be 1.5x

Total current manufacturing costs = Direct material used + Direct labor + Manufacturing overhead applied

30600 = 12600 + x + 1.5x

2.5x = 18000

x = 7200

Thus, direct labor is 7200.

Manufacturing overhead applied = 7200 * 1.5

Manufacturing overhead applied = 10800