Exercise 16-4 Manufacturing cost data for Orlando Company, which uses a job orde

Question

Exercise 16-4 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 O decimal places, e.g. 5,275.) Case A Case B Case C Direct materials used $92,000 $64,150 52,000 31,200 146,950 Direct labor 146,900 Manufacturing overhead applied Total manufacturing costs 217,750 Work in process 1/1/17 Total cost of work in process Work in process 12/31/17 Cost of goods manufactured 19,400 19,100 208,900 16,900 193,900 223,200

Explanation / Answer

Predetermined overhead rate=MAnufacturing overhead applied/Direct labor

=(31200/52000)(as in case A)

=60%direct labor cost

Total manufacturing cost=Direct materials used+Direct labor+Manufacturing overhead applied

Total cost of work in process=Total manufacturing cost+Beginning WIP

Hence cost of goods manufactured=Total cost of work in process-Ending WIP

In case C;direct labor+Manufacturing overhead=(217750-64150)=$153600

Direct labor+0.6Direct labor=153600

Direct labor=153600/(1+0.6)

=$96000

Hence manufacturing overhead=$96000*0.6=$57600

Case A Case B Case C Direct materials used 63750 92000 64150 Direct labor 52000 146900 96000 Manufacturing overhead applied 31200 $88140 57600 Total manufacturing cost 146950 327040 217750 Work in pricess 1/1/17 61950 19400 19100 Total cost of work in process 208900 346,440 236850 Work in process 12/31/17 15000 16900 13650 Cost of goods manufactured 193900 329540 223200

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