Question

Manufacturing cost data for Orlando Company, which uses a job order cost system, are presented below. Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is the same. (Round overhead rate to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.) Case A Case B $92,500 (a) Direct materials used 58150 54,000 Direct labor 143,200 | (d) Manufacturing overhead applied 40,500 Total manufacturing costs (e) 152,650 Work in process 1/1/20 (b) 17,500 Total cost of work in process (f) 211,300 Work in process 12/31/20 (c) 16,200 Cost of goods manufactured (g) 197,900 Last saved 3 days ago. Attempts: 0 of 7 used Save for Later Submit Answer

Answer 1

Case A:

Total manufacturing costs = Direct materials used + Direct labor + Manufacturing overhead applied
$152,650 = Direct materials used + $54,000 + $40,500
Direct materials used = $58,150

Predetermined overhead rate = Manufacturing overhead applied / Direct labor cost
Predetermined overhead rate = $40,500 / $54,000
Predetermined overhead rate = 75% of direct labor cost

Total cost of work in process = Work in process 1/1/20 + Total manufacturing costs
$211,300 = Work in process 1/1/20 + $152,650
Work in process 1/1/20 = $58,650

Cost of goods manufactured = Total cost of work in process - Work in process 12/31/20
$197,900 = $211,300 - Work in process 12/31/20
Work in process 12/31/20 = $13,400

Case B:

Predetermined overhead rate = 75% of direct labor cost
Predetermined overhead rate = 75% * $143,200
Predetermined overhead rate = $107,400

Total manufacturing costs = Direct materials used + Direct labor + Manufacturing overhead applied
Total manufacturing costs = $92,500 + $143,200 + $107,400
Total manufacturing costs = $343,100

Total cost of work in process = Work in process 1/1/20 + Total manufacturing costs
Total cost of work in process = $17,500 + $343,100
Total cost of work in process = $360,600

Cost of goods manufactured = Total cost of work in process - Work in process 12/31/20
Cost of goods manufactured = $360,600 - $16,200
Cost of goods manufactured = $344,400