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]

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 14,000 12,000 Direct labor 13,000 Manufacturing overhead applied 11,500 Total current manufacturing costs 28,000 30,000 Beginning work in process inventory 8,400 7,900 Ending work in process inventory 5,400 8,300 Cost of goods manufactured 47,000 24,001 Beginning finished goods inventory 3,700 11,700 Ending finished goods inventory 7,800 6,700 Cost of goods sold 38,000 41,000

Solution

Case 1 Case 2 Case 3 Direct material used 14,000 8833 12,000 Direct labor 13,000 7667 7200 Manufacturing overhead applied 13000*1.5 = 19500 11,500 10800 Total current manufacturing costs 46500 28,000 30,000 Beginning work in process inventory 8,400 27300 7,900 Ending work in process inventory 5,400 8,300 13899 Cost of goods manufactured 49500 47,000 24,001 Beginning finished goods inventory 3,700 11,700 23699 Ending finished goods inventory 7,800 20700 6,700 Cost of goods sold 45400 38,000 41,000