Question

Mulligan Manufacturing Company uses a job order cost system with overhead applied to products at a rate of 150 percent of direct labor cost. Required: Treating each case independently, selected from the manufacturing data given below, find the missing amounts. You should do them in the order listed. (Hint: For the manufacturing costs in Case 3, first solve for conversion costs and then determine how much of that is direct labor and how much is manufacturing overhead.) (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Enter all amounts as positive values.) Case 1 Case 2 Case 3 Direct material used 11,000 10,800 Direct labor 16,000 Manufacturing overhead applied 12,500 Total current manufacturing costs 24,500 27,000 8,700 Beginning work in process inventory 8,300 Ending work in process inventory 5,700 8,700 Cost of goods manufactured 42,000 30,001 Beginning finished goods inventory 4,900 10,600 Ending finished goods inventory 7,800 6,200 Cost of goods sold 33,000 43,000

Answer 1

				Case 1	Case 2	Case 3
Direct material used				11000	3667	10800
					(Note:6)
Direct labor				16000	8333	6480
					(Note:5)	(Note:9)
Manufacturing overhead applied				24000	12500	9720
				(Note:1)		(Note:9)
Total current manufacturing costs				51000	24500	27000
				(Note:2)
Beginning work in process inventory				8700	26200	8300
					(Note:7)
Ending work in process inventory				5700	8700	5299
						(Note:10)
Cost of goods manufactured				54000	42000	30001
				(Note:3)
Beginning finished goods inventory				4900	10600	19199
						(Note:11)
Ending finished goods inventory				7800	19600	6200
					(Note:8)
Cost of goods sold				51100	33000	43000
				(Note:4)
Note:1
Manufacturing overhead applied=Direct labor*150%=16000*150%=$ 24000
Note:2
Total current manufacturing costs=Direct material used+Direct labor+Manufacturing overhead applied=11000+16000+24000=$ 51000
Note:3
Cost of goods manufactured=Total current manufacturing costs+Beginning work in process inventory-Ending work in process inventory=51000+8700-5700=$ 54000
Note:4
Cost of goods sold=Cost of goods manufactured+Beginning finished goods inventory-Ending finished goods inventory=54000+4900-7800=$ 51100
Note:5
Manufacturing overhead applied=Direct labor*150%
Direct labor=Manufacturing overhead applied/150%=12500/150%=$ 8333
Note:6
Total current manufacturing costs=Direct material used+Direct labor+Manufacturing overhead applied
Direct material used=Total current manufacturing costs-Direct labor-Manufacturing overhead applied=24500-8333-12500=$ 3667
Note:7
Cost of goods manufactured=Total current manufacturing costs+Beginning work in process inventory-Ending work in process inventory
Beginning work in process inventory=Cost of goods manufactured-Total current manufacturing costs+Ending work in process inventory=42000-24500+8700=$ 26200
Note:8
Cost of goods sold=Cost of goods manufactured+Beginning finished goods inventory-Ending finished goods inventory
Ending finished goods inventory=Cost of goods manufactured+Beginning finished goods inventory-Cost of goods sold=42000+10600-33000=$ 19600
Note:9
Total current manufacturing costs=Direct material used+Direct labor+Manufacturing overhead applied
Direct labor+Manufacturing overhead applied=Total current manufacturing costs-Direct material used=27000-10800=$ 16200
Manufacturing overhead applied=Direct labor*150%
If direct labor=x,
Manufacturing overhead applied=x*150%=1.5x
Direct labor+Manufacturing overhead applied=16200
x+1.5x=16200
2.5x=16200
x=16200/2.5=$ 6480
Direct labor=$ 6480
Manufacturing overhead applied=6480*150%=$ 9720
Note:10
Cost of goods manufactured=Total current manufacturing costs+Beginning work in process inventory-Ending work in process inventory
Ending work in process inventory=Total current manufacturing costs+Beginning work in process inventory-Cost of goods manufactured=27000+8300-30001=$ 5299
Note:11
Cost of goods sold=Cost of goods manufactured+Beginning finished goods inventory-Ending finished goods inventory
Beginning finished goods inventory=Cost of goods sold-Cost of goods manufactured+Ending finished goods inventory=43000-30001+6200=$ 19199
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