Question

Manufacturing costs for Davenport Company during 2018 were as follows: Beginning Finished Goods, 1/1/18 $ 24,900 Beginning Raw Materials, 1/1/18 36,300 Beginning Work in Process, 1/1/18 111,100 Direct Labor for 2018 276,100 Ending Finished Goods, 12/31/18 23,200 Ending Raw Materials, 12/31/18 40,650 Ending Work in Process, 12/31/18 121,400 Material Purchases for 2018 305,000 (including $19,000 of indirect material) 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.

Answer 1

Ans. 1	Particulars	Amount
	Beginning raw materials inventory	$36,300
	Add: Purchase of direct materials	$305,000
	Raw materials available	$341,300
	Less: Ending raw materials inventory	-$40,650
	Less: Indirect materials	-$19,000
	Direct materials used	$281,650
Ans. 2	Overhead applied = Direct labor cost * Overhead rate
	$276,100 * 83%
	$229,163
Ans. 3	Particulars	Amount
	Direct materials used	$281,650
	Direct labor	$276,100
	Manufacturing overhead applied	$229,163
	Total manufacturing costs	$786,913
Ans. 4	Particulars	Amount
	Total manufacturing costs	$786,913
	Beginning Work in process inventory	$111,100
	Total cost of work in process	$898,013
	Ending Work in process inventory	-$121,400
	Cost of goods manufactured	$776,613
Ans. 5	Particulars	Amount
	Cost of Goods Manufactured	$776,613
	Add: Beginning finished goods inventory	$24,900
	Cost of goods available for sale	$801,513
	Less: Ending finished goods inventory	-$23,200
	Cost of goods sold	$778,313