Question

Tappan, Inc., manufactures one product and accounts for costs using a job cost system. You have obtained the following information from the corporation's books and records for the year ended December 31, Year 1:

•	Total manufacturing cost during the year was $2,368,000 based on actual direct material, actual direct labor, and applied manufacturing overhead.
•	Manufacturing overhead was applied to work in process at 175 percent of direct labor dollars. Applied manufacturing overhead for the year was 40 percent of the total manufacturing cost during the year.

Required:

Compute actual direct material used, actual direct labor, and applied manufacturing overhead. (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)

Answer 1

Actual Direct material	$     8,79,543
Actual Direct labor	$     5,41,257
Applied Manufacturing Overheads	$     9,47,200
Total Manufacturing cost	$ 23,68,000

A	Total Manufacturing overheads	$ 23,68,000
B=A x 40%	Applied manufacturing overheads	$     9,47,200
C	Applied manufacturing overheads	175% of direct labor
D=C/175 x 100	Direct labor	$     5,41,257
E=A-B-D	Direct material	$     8,79,543

Applied manufacturing overheads are 175% of direct labor cost so it means Direct labor will be 100% of Applied manufacturing overheads as calculated above.

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