Manufacturing cost data for Pena Company, which uses a job order cost system, ar

Question

Manufacturing cost data for Pena 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.

Case A Case B Case C
Direct materials used a $ $ 83,000 $ 63,150
Direct labor 50,000 120,000 h
Manufacturing overhead applied 42,500 d i
Total manufacturing costs 155,650 e 213,000
Work in process 1/1/10 b 15,500 18,000
Total cost of work in process 201,500 f j
Work in process 12/31/10 c 11,800 k
Cost of goods manufactured 192,300 g 222,000

Explanation / Answer

Missing amount for each letter: Case A:
Works in process 1/1/10 (b)   = Total cost of works in process - Total manufacturing costs                                                = $201,500 - 155,650 So, b                                       = 45,850 Works in process 12/3/10 (c)   = Total cost of works in process - cost of goods manufactured                                                 = 201, 500 - 192,300 So, c                                        = $9,200 Case B: Manufacturing overhead applied for 50,000 direct labor = 42,500 So for one unit of direct labor manufacturiong overhead = 42,500 / 50,000 Manufacturing overhead per unit of direct labor              = $0.85 So manufacturing overhead for 120,000 direct labor       = 0.85 x 120,000 Manufacturing overhead (d)                                           =102,000 Total manufacturing costs (e)                                          = 83,000 + 120,000 + 102,000 Total manufacturing costs (e)                                          = $305,000 Total cost of works in process (f)                                   = 305,000 + 15,500 So total cost of works in process                                    = 320,500 Cost of goods manufactured (g)                                      = Total cost of works in process - ending w/p                                                                                       = 320,000 - 11,800 So cost of goods manufactured (g)                                  = $308,200 Case C: Direct labor for $83,000 material                                     = 120,000 So direct labor for $1 material                                          = 120,000 / 83,000 Direct labor cost for $1 material                                       = $1.44 So direct labor cost for $63,150 material                          = 1.44 x 63,150 Direct labor (h)                                                                 = $91,301 Manufacturing overhead applied (i)                                    = 0.85 x direct labor                                                                                          = 0.85 x 91,301 Manufacturing overhead applied (i)                                    = $77,606 Total cost of works in process (j)                                       = 77,606 + 213,000 + 18,000 Total cost of works in process (j)                                       = $308,606 Works in process 12/31/10 (k)                                     = Total cost of works in process (j) - 222,000                                                                                     = 308,606 - 222,000 Works in process (k)                                                    = 86,606. Direct labor for $83,000 material                                     = 120,000 So direct labor for $1 material                                          = 120,000 / 83,000 Direct labor cost for $1 material                                       = $1.44 So direct labor cost for $63,150 material                          = 1.44 x 63,150 Direct labor (h)                                                                 = $91,301 Manufacturing overhead applied (i)                                    = 0.85 x direct labor                                                                                          = 0.85 x 91,301 Manufacturing overhead applied (i)                                    = $77,606 Total cost of works in process (j)                                       = 77,606 + 213,000 + 18,000 Total cost of works in process (j)                                       = $308,606 Works in process 12/31/10 (k)                                     = Total cost of works in process (j) - 222,000                                                                                     = 308,606 - 222,000 Works in process (k)                                                    = 86,606.

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