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 ase 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 19,000 13,000 19,500 51,500 9,600 5,200 55,900 4,800 7,400 53,300 12,300 6,666 10,000 27,000 31,200 7,400 9,400 40,000 11.100 8,001 6,000 34,000 33,000

Explanation / Answer

Given the data, we can calculate all the values that are missing as follows

Case 1

a)Manufacturing Overhead Applied = $13000*150%= $19500

b)Total current manufactring cost = Direct material+ Direct Labor + Manufacturing Overhead Applied

= 19000+13000+19500

= $51500

c)Cost of goods manufactured = Total current manufactring cost +Beginning WIP- Ending WIP

= $51500+9600-5200

=$55900

d) Cost of goods sold = Cost of goods manufactured+Beginning Finished Goods Inventory- Ending Finished Goods Inventory

= $55900+4800-7400 = $53300

Case 2

e) Direct Labor = Manufacturing overhead applied *100/150

= $10000*100/150

= $6666

f) Direct material used = $27000-$10000-$6666 = $10334

g)Beginning Work in Process Inventory = Let it be X

We know that Cost of goods manufactured = Total current manufactring cost +Beginning WIP- Ending WIP

By putting values in the above equation, we can find value for X

$40000= $27000+X-9400

X = $22400

Beginning Work in Process Inventory = $22400

h) Let Ending finished goods inventory = X

We know that Cost of goods sold = Cost of goods manufactured+Beginning Finished Goods Inventory- Ending Finished Goods Inventory

By putting values in the above equation, we can find value for X

$33000= $40000+11100-X

X = $18100

Ending Finished Goods Inventory= $18100

Case 3

i)Conversion costs = $31200-12300= $18900

We know that manufacturing overhead applied = 150% of Labor

Conversion costs = 100% labor+(manufacturing overhead applied)150% of labor

250% labor = $18900

Labor = $18900/250%

= $7560

j) manufacturing overhead applied = $18900-$7560 = $11340

k)

Ending Work in Process Inventory = Let it be X

We know that Cost of goods manufactured = Total current manufactring cost +Beginning WIP- Ending WIP

By putting values in the above equation, we can find value for X

$8001= $31200+7400-X

X = $30599

Ending Work in Process Inventory = $22400

l)

Let Beginning finished goods inventory = X

We know that Cost of goods sold = Cost of goods manufactured+Beginning Finished Goods Inventory- Ending Finished Goods Inventory

By putting values in the above equation, we can find value for X

$34000= $8001+X-6000

X = $31999

Beginning Finished Goods Inventory= $31999

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