Question

E2-6 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 listed. (Hint: For the (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar 17,000 32,400 4,100 13,001 4.100 5,100

Answer 1

Direct material+Direct labor+Manufacturing overhead=Total current manufacturing costs

Total current manufacturing costs+Beginning WIP-Ending WIP=Cost of goods manufactured

Cost of goods manufactured+Beginning finished goods inventory-Ending finished goods inventory=Cost of goods sold

	Case 1	Case 2	Case 3
Direct material used	17000	(27500-12500-8333)=$6,667	12600
Direct labor	17000	(12500/1.5)=$8333	7920(NOTE 1)
Manufacturing overhead	(17000*150%)=$25500	12500	11880
Total current manufacturing cost	(17000+17000+25500) =$59500	27500	32400
Beginning WIP	8300	(43000+9200-27500) =$24700	7200
Ending WIP	4100	9200	(32400+7200-13001) =$26599
Cost of goods manufactured	(59500+8300-4100) =$63700	43000	13001
Beginning finished goods inventory	4100	11800	(42000+5100-13001)= $34099
Ending finished goods inventory	8500	(43000+11800-33000) =$21800	5100
Cost of good sold	(63700+4100-8500) =$59300	33000	42000

NOTE 1:

For case 3:

Direct labor+Manufacturing overhead=(32400-12600)

Direct labor+1.5Direct labor=19800

Hence Direct labor=19800/(1.5+1)

$7920

Hence manufacturing overhead= $7920*1.5

=$11880

2.

Predetermined overhead rate=Estimated overhead/Estimated direct labor hours

=(313500/28500)

which is equal to

=$11