Mulligan Manufacturing Company uses a job order cost system with overhead applie

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 Direct labor Manufacturing overhead applied Total current manufacturing costs Beginning work in process inventory Ending work in process inventory Cost of goods manufactured Beginning finished goods inventory Ending finished goods inventory Cost of goods sold 10,000 10,800 19,000 12,000 27,000 30,600 9,900 8,000 9,200 48,000 11,500 6,000 30,001 4,600 8,500 5,800 32,000 39,000

Explanation / Answer

Direct material+Direct labor+Manufacturing overhead=Total manufacturing cost

Total manufacturing cost+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 2:

Direct labor=150%OVerhead

Hence direct labor=$12000/1.5

=$8000

Hence Direct materials=(27000-12000-8000)=$7000

Case 3:

Direct labor +Manufacturing overhead=(30600-10800)=$19800

Direct labor +1.5Direct labor =19800

Direct labor =19800/(1+1.5)

=$7920

Hence manufacturing overhead=$7920*1.5

=$11880

(57500+9900-6000)

=$61400

Case 1 Case 2 Case 3 Direct materials 10000 7000 10800 Direct labor 19000 8000 7920 Manufacturing overhead (19000*1.5)=$28500 12000 11880 Total current manufacturing cost 57500 27000 30600 Beginning WIP 9900 (48000+9200-27000)=$30200 8000 Ending WIP 6000 9200 (30600+8000-30001)=$8599 Cost of goods manufactured

(57500+9900-6000)

=$61400

48000 30001 Beginning finished goods inventory 4600 11500 (39000+5800-30001)=$14799 Ending finished goods inventory 8500 (48000+11500-32000)=$27500 5800 COGS (61400+4600-8500)=$57500 32000 39000.

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