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
Direct materials used		$enter a dollar amount	(a)		$87,700
Direct labor		52,000			147,400
Manufacturing overhead applied		41,600			enter a dollar amount	(d)
Total manufacturing costs		146,950			enter a dollar amount	(e)
Work in process 1/1/20		enter a dollar amount	(b)		25,100
Total cost of work in process		203,700			enter a dollar amount	(f)
Work in process 12/31/20		enter a dollar amount	(c)		15,500
Cost of goods manufactured		196,800			enter a dollar amount	(g)

Answer 1

The Solution of the Given Question is Mentioned Below

Solution of Case A

Solution of the Case A Direct Material Direct Labour Manufacturing Overhead $53,350 Explanation-1 $52,000 $41,600 Total Manufacturing Cost $146,950 Opening Work in process as on 01-Jan-20 $56,750 Explanation-2 Total Cost of Work in Progress $203,700 Closing Work in process as on 31-Dec-20 $6,900 Explanation-3 Cost of Goods Manufactured $196,800 Explanation-1 Computation of Direct Material Cost Total Manufacturing Cost Less: Direct Labour Less: Manufacturing Overhead Direct Material Cost Amount $146,950 $52,000 $41,600 $53,350 Explanation-2 Opening Work in process as on 01-Jan-20 Total Cost of Work in Progress Less: Total Manufacturing Cost Opening Work in process as on 01-Jan-20 Amount $203,700 $146,950 $56,750 Explanation-3 Closing Work in process as on 31-Dec-20 Total Manufacturing Cost Add: Opening Work in process as on 01-Jan-20 Less: Cost of Goods Manufactured Closing Work in process as on 31-Dec-20 Amount $146,950 $56,750 $196,800 $6,900

Solution of Case B

Solution of the Case B $87,700 $147,400 $117,920 Explanation-1 Direct Material Direct Labour Manufacturing Overhead Total Manufacturing Cost Opening Work in process as on 01-Jan-20 $353,020 Explanation-2 $25,100 Total Cost of Work in Progress $378,120 Explanation-3 Closing Work in process as on 31-Dec-20 $15,500 Cost of Goods Manufactured $362,620 Explanation-4 Explanation-1 Computation of Manufacturing Overhead Amount As Given in Question Manufacturing overhead is applied on the basis of direct labor cost and the rate is the same in Case A & Case B Student need to calculate the Maufacturing Overhead from Case A ie: Manufacturing Overhead in Case A (A) $41,600 Direct Labour in Case A (B) $52,000 Overhead Applied Rate for Case B (C)= A/B 80% Manufacturing Overhead = Direct Labour X 80% Manufacturing Overhead=$147400 X 80%=$117920 Explanation-2 Total Manufacturing Cost Amount Direct Material $87,700 Add: Direct Labour $147,400 Add: Manufacturing Overhead $117,920 Total Manufacturing Cost $353,020 Explanation-3 Total Cost of Work in Progress Amount Opening Work in process as on 01-Jan-20 $25,100 Less: Total Manufacturing Cost $353,020 Total Cost of Work in Progress $378,120 Explanation-4 Cost of Goods Manufactured Total Manufacturing Cost Add: Opening Work in process as on 01-Jan-20 Less: Closing Work in process as on 31-Dec-20 Cost of Goods Manufactured Amount $353,020 $25,100 $15,500 $362,620