Question

Manufacturing cost data for Orlando Company, which uses a job order cost system, are presented below.

	Case A	Case B	Case C
Direct materials used	$  (a)	$ 83,000	$ 63,150
Direct labor	50,000	140,000	(h)
Manufacturing overhead applied	42,500	(d)	(i)
Total manufacturing costs	145,650	(e)	213,000
Work in process 1/1/17	(b)	15,500	18,000
Total cost of work in process	201,500	(f)	(j)
Work in process 12/31/17	(c)	11,800	(k)
Cost of goods manufactured	192,300	(g)	222,000

Instructions

Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is the same.

Answer 1

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

Total manufacturing cost+Beginning WIP=Total cost of WIP

Total cost of WIP-Ending WIP=Cost of goods manufactured

Predetermined manufacturing overhead rate=($42500/$50000)=85%of direct labor cost

For case C:

Direct labor+manufacturing overhead=(213000-63150)

Direct labor+0.85direct labor=149850

Hence direct labor=149850/1.85

=$81000

Hence manufacturing overhead=(81000*85%)=$68850.

	A	B	C
Direct materials used	$53150	83000	63150
Direct labor	50000	140,000	81000
Manufacturing overhead applied	42500	$119000	$68850
Total manufacturing cost	145650	$342000	$213000
Work in process 1/1/17	$55850	15500	18000
Total cost of work in pricess	201500	$357500	$231000
Work in process 12/31/17	$9200	11800	$9000
Cost of goods manufactured	192300	$345700	222000