Question

Deer Lake Inc. uses a job order costing system with manufacturing overhead applied to products at a rate of 150% of direct labor cost. Treating each case independently, find the missing amounts (Input all amounts as positive values.):

Case 1 Case 2 Case 3 Direct materials used $20,600 $10,000 Direct labor $26,800 Manufacturing overhead applied $44,100 Total manufacturing costs $97,000 $30,000 Beginning Work in Process $10,300 $7,200 Ending Work in process $7,600 $9,500 Cost of goods manufactured $94,400 $34,100 Beginning Finished Goods $11,500 $13,800 Ending Finished Goods $15,200 $4,400 Cost of goods sold (unadjusted) $91,700 $36,900

Answer 1

Case 1

Manufacturing overhead applied = 1.5 * Direct labor

= 1.5 * $26,800

= $40,200

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

= $20,600 + $26,800 + $40,200

= $87,600

Cost of goods manufactured = Total manufacturing costs + Beginning Work in Process - Ending Work in process

= $87,600 + $10,300 - $7,600

= $90,300

Cost of goods sold = Cost of goods manufactured + Beginning Finished Goods - Ending Finished Goods

= $90,300 + $11,500 - $15,200

= $86,600

Case 2

Manufacturing overhead applied = 1.5 * Direct labor

Direct labor = $44,100 / 1.5

= $29,400

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

$97,000 = Direct material used + $29,400 + $44,100

Direct labor used = $23,500

Cost of goods manufactured = Total manufacturing costs + Beginning Work in Process - Ending Work in process

$94,400 = $97,000 + Beginning Work in Process - $9,500

Beginning Work in Process = $6,900

Cost of goods sold = Cost of goods manufactured + Beginning Finished Goods - Ending Finished Goods

$91,700 = $94,400 + $13,800 - Ending Finished Goods

Ending Finished Goods = $16,500

Case 3

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

$30,000 = $10,000 + Direct labor + Manufacturing overhead applied

Direct labor + Manufacturing overhead applied = $20,000

Direct labor = x

If Manufacturing overhead applied = 1.5 x

x + 1.5 x = $20,000

2.5 x = $20,000

x = $8,000

Direct labor = $8,000

Manufacturing overhead applied = 1.5 * $8,000

= $12,000

Cost of goods manufactured = Total manufacturing costs + Beginning Work in Process - Ending Work in process

$34,100 = $30,000 + $7,200 - Ending Work in process

Ending Work in process = $3,100

Cost of goods sold = Cost of goods manufactured + Beginning Finished Goods - Ending Finished Goods

$36,900 = $34,100 +  Beginning Finished Goods - $4,400

Beginning Finished Goods = $7,200