Question

E2-6 (Algo) 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 os positive values.) Case 2 Case 1 17,000 14.000 Case 3 14.700 12,000 27,000 33.000 7800 Direct material used Direct labor 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 9,900 4,500 9,400 45,000 11,000 23001 3.100 700 38.000 39000

Answer 1

	Case 1	Case 2	Case 3
Direct materials used	17000	7000 [ 27000-8000-12000 ]	14700
Direct labor	14000	8000 [ 12000/150% ]	7320 [ Refer working note ]
Manufacturing overhead applied	21000 [ 14000*150% ]	12000	10980 [ 7320 * 150% ]
Total current manufacturing costs	52000 [ 17000+14000+21000 ]	27000	33000
Beginning work in process inventory	9900	27400 [ 45000+9400-27000 ]	7800
Ending work in process inventory	4500	9400	17799 [ 33000+7800-23001 ]
Cost of goods manufactured	57400 [ 52000+9900-4500 ]	45000	23001
Beginning finished goods inventory	3100	11000	22199 [ 39000-23001+6200 ]
Ending finished goods inventory	7300	18000 [ 45000+11000-38000 ]	6200
Cost of goods sold	53200 [ 57400+3100-7300 ]	38000	39000

Working note 1 [ Case 3 ] :
Conversion cost = Total current manufacturing cost - Direct materials used = 33000 - 14700	18300
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
18300 = 2.5Direct labor
Direct labor = 18300 / 2.5	7320