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 Case C $89,300 $73,050 (a) Direct materials used 63850 149,800 (h) Direct labor 50,000 (i) Manufacturing overhead applied (d) 40,000 119840 Total manufacturing costs (e) 153,850 218,850 Work in process 1/1/17 (b) 20,200 18,400 53050 Total cost of work in process (f) (j) 206,900 Work in process 12/31/17 (c) 15,000 (k) 9700 (g) Cost of goods manufactured 197,200 231,600

Answer 1

Manufacturing overhead as a percentage of direct labor cost = $40,000 / $50,000 = 80%

Direct labor cost and Manufacturing overhead for Case C = $218,850 - $73,050 = $145,800

$145,800 is equal to 180 of which 100 is direct labor cost and 80 is manufacturing overhead.

Direct labor cost = $145,800 X 100/180 = $81,000

Manufacturing overhead = $145,800 X 80/180 = $64,800

	Case A	Case B	Case C
Direct material used	$63,850	$89,300	$73,050
Direct labor	$50,000	$149,800	$81,000
Manufacturing overhead applied	$40,000	$119,840	$64,800
Total manufacturing costs	$153,850	$358,940	$218,850
Work in process 1/1/17	$53,050	$20,200	$18,400
Total cost of work in process	$206,900	$379,140	$237,250
Work in process 12/31/17	$9,700	$15,000	$5,650
Cost of goods manufactured	$197,200	$364,140	$231,600