Question

Barfield Mfg. Co. applies overhead to jobs at a rate of 140 percent of direct labor cost. The following account information is available.

Calculate the following items that are missing from Barfield's account information:

a.Cost of goods sold	$
b.Cost of goods manufactured	$
c.Amount of overhead applied to production	$
d.Cost of direct material used	$
e.Cost of direct material purchased	$

Answer 1

Starting from the end:
DB Cost of Goods Sold ?
CR Finished Goods Inv 1,890,000

So, COGS = 1,890,000

With COGS found, We can continue backwards to Finished Goods Inventory

Finished Goods inventory:
Begin Balance 90,000 + X (Goods completed) - 1,890,000 (COGS) = 7,000
X - 1,800,000 = 7,000
X = 1,807,000 = Goods Completed

This allows us to continue backwards to Work In Process:
Beg. Balance 56,000 + X + Direct Labor 395,000 + Manufacturing Overhead (DL * 140% = 553,000) - Goods Completed 1,807,000because:

Goods Completed 1,807,000
Work In Process ?= 1,807,000

which leads to: x-803,000 = 27,640
X = 830,640 = Direct Material

Direct Materials
Beg. Bal 24,600 + x - 830,640 = 4,100
X - 806,040 = 4,100
X = 810,140

Because:

DB Work In Process 830,640
CR Direct Materials ? = 830,640

Thus:

A. Cost of Goods Sold = 1,890,000
B. Cost of Goods Manufactured = 3,607,000

Beg. finished Inventory + COGM - End FInished inventory = COGS
90,000 + X - 1,807,000 = 1,890,000
X = 3,607,000

C. Amount of overhead applied to production: 553,000

DL * 140% = 553,000

D. Direct Materials: 830,640
E. Direct Materials Purchased: 810,140

COGM threw my for a loop because of how it's labled (usually it states "Ending inventory") so I'm not 100% on it. But hey, it's only 25 karma pointsanyways ;)