E26 Finding Unknown Values in the Cost of Goods Manufactured

E2-6 Finding Unknown Values in the Cost of Goods Manufactured Report [LO 2.3,2-6 how much is manufacturing overhead (Do not r 1,700 25,000 10,100 5,100 38,000

Solution

CASE 1 CASE 2 CASE 3 Direct material 18000 3333 11700 Direct labor 19000 8667 7560 Manufacturing overhead applied 28500 13000 11340 Total curent manufacturing costs 65500 25000 30600 Beginning work in process inventory 9100 26900 8600 Ending work in process inventory 4800 9900 Cost of goods manufactured 69800 42000 Beginning finished goods inventory 3500 10100 Ending finished goods inventory 7100 10100 5100 Cost of goods sold 66200 42000 38000 Manufacturing overhead is applied @150% of direct labor cost. For Case 1: Direct labor 19000 Manufacturing overhead (150% of $19,000) 28500 Total current manufacturing costs = Direct material+Direct labor+ Manufacturing overhead applied                                                                       =18,000+19,000+28,500 = 65,500 Cost of goods manufacturied = Current manufacturing costs                                                                   + beginning work in process                                                                   - ending work in process                                                              =65,500+9,100-4,800 = 69,800 Cost of goods sold = Cost of goods manufactured                                             + beginning finished goods inventory                                              - ending finished goods inventory                                          = 69,800+3,500-7,100 = 66,200 For Case 2: Manufacturing overhead 13000 Direct labor (13,000 / 150%) 8667 Direct material = Total current manufacturing costs                                      - Direct labor - Manufacturing overhead applied                                  =25,000 - 8,667 - 13,000 = 3,333 Beginning work in process inventory = Cost of goods manufactured                                                                                 + Ending work in process inventory                                                                                 - Total curent manufacturing costs                                                                              =42,000+9,900-25,000 = 26,900 Ending finished goods inventory = Cost of goods manufactured                                                                           + beginning finished goods inventory                                                                           - Cost of goods sold                                                                        =42,000 + 10,100 - 42,000 = 10,100 For case 3: Direct labor + Manufacturing overhead applied                              = Total current manufacturing costs - Direct material                              =30,600 - 11,700 = 18,900 Manufacturing overhead applied = 150% of direct labor. Direct labor + 150% direct labor = 18,900 250% direct labor = 18,900 Direct labor = 18,900 / 250% = 7,560 Manufacturing overhead applied = 150% of direct labor                                                                      = 150% of 7,560 = 11,340 The other costs cannot be calculated , as the required information is not provided. Either cost of goods manufactured or beginning finished goods inventory need to be provided.