Question

Manufacturing cost data for Orlando Company, which uses a job order cost system, are presented below. 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. (Round overhead rate to 2 decimal places, e.g. 15.75 and final answers to 0 decimal places, e.g. 5,275.) Case A Case B Case C Direct materials used $ (a) $93,600 $71,350 Direct labor 54,000 146,500 (h) Manufacturing overhead applied 32,400 (d) (i) Total manufacturing costs 155,550 (e) 208,950 Work in process 1/1/17 (b) 23,900 19,000 Total cost of work in process 205,300 (f) (j) Work in process 12/31/17 (c) 16,600 (k) Cost of goods manufactured 198,000 (g) 224,900

Answer 1

Solution:

Rate of Manufacturing Overhead application = Applied Manufacturing overhead in Case A/ Direct Labor in case A

= $32400/ $54000 = 60%

	Case A	Case B	Case C
Direct material Used	$69,100.00	$93,600.00	$71,350.00
Direct labor	$54,000.00	$146,500.00	$86,000.00
Manufacturing Overhead applied (60% of Direct Labor)	$32,400.00	$87,900.00	$51,600.00
Total manufacturing costs	$155,500.00	$328,000.00	$208,950.00
Add: WIP 1/1/17	$49,800.00	$23,900.00	$19,000.00
Total Cost of work in process	$205,300.00	$351,900.00	$227,950.00
Less: Work in process 12/31/17	$7,300.00	$16,600.00	$3,050.00
Cost of Goods Manufactured	$198,000.00	$335,300.00	$224,900.00