Question

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 2 Case 1 10,000 17,000 Case 3 14,700 Direct material used Direct labor 12,500 27,000 32,700 8,600 9,500 5,800 Manufacturing overhead applied Total current manufacturing costs Beginning work in process inventory Ending work in process inventory Cost of goods manufactured Beginning finished goods inventory Ending finished goods inventory Cost of goods sold 9,400 48,000 11,500 30,001 3,600 7,000 5,700 38,000 35,000

Answer 1

	Case 1	Case 2	Case 3
Direct materials used	10000	6167 [ 27000-8333-12500 ]	14700
Direct labor	17000	8333 [ 12500/150% ]	7200 [ Refer working note 1 ]
Manufacturing overhead applied	25500 [ 17000*150% ]	12500	10800 [ 7200*150% ]
Total current manufacturing costs	52500 [ 10000+17000+25500 ]	27000	32700
Beginning work in process inventory	9500	30400 [ 9400+48000-27000 ]	8600
Ending work in process inventory	5800	9400	11299 [ 32700+8600-30001 ]
Cost of goods manufactured	56200 [ 52500+9500-5800 ]	48000	30001
Beginning finished goods inventory	3600	11500	13699 [ 38000+5700-30001 ]
Ending finished goods inventory	7000	24500 [ 48000+11500-35000 ]	5700
Cost of goods sold	52800 [ 56200+3600-7000 ]	35000	38000

Working note 1 [ Case 3 ] :
Conversion cost = Total current manufacturing cost - Direct materials used = 32700 - 14700	18000
Manufacturing overhead applied = Direct labor * 150% = 1.5Direct labor
Conversion cost = Direct labor + Manufacturing overhead applied
Conversion cost = Direct labor + 1.5Direct labor
Conversion cost = 2.5Direct labor
18000 = 2.5Direct labor
Direct labor = 18000 / 2.5	7200