Question

E2-6 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 1 Case 2 Case 3 Direct material used 15,000 14,400 Direct labor 11,000 Manufacturing overhead applied 11,000 Total current manufacturing costs 28,500 28,200 Beginning work in process inventory 9,200 8,300 Ending work in process inventory 4,200 9,400 Cost of goods manufactured 48,000 1 Beginning finished goods inventory 3,500 11,600 Ending finished goods inventory 7,900 5,200 Cost of goods sold 36,000 40,000

Answer 1

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

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

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

For case 3:

Direct labor+Manufacturing overhead applied=(28200-14400)=13800

Direct labor+1.5Direct labor=13800

Hence direct labor=(13800/2.5)=$5520

Case 1 Case 2 Case 3 Direct material used 15,000 $10167 14,400 Direct labor 11,000 $7333 $5520 Manufacturing overhead applied $16500 11,000 $8280 Total current manufacturing costs $42500 28,500 28,200 Beginning work in process inventory 9,200 $28900 8,300 Ending work in process inventory 4,200 9,400 $ 36499 Cost of goods manufactured $47500 48,000 1 Beginning finished goods inventory 3,500 11,600 $45199 Ending finished goods inventory 7,900 $23600 5,200 Cost of goods sold $43100 36,000 40,000