2-6 Hnding Unknown Values in the Cost of Goods Manutactured Report LIC) 2-3, 2-6

Question

2-6 Hnding Unknown Values in the Cost of Goods Manutactured Report LIC) 2-3, 2-6] Mullgan Manufactunng Company uscs a order cost system wth overnead applied to products at a rate at 150 percent of cirect labar cast Required: Tiealing earl case n e en ent se : et ro n he manufacturing data !ven be ow n the russin amounts u s laud ner l In the der isled n ar nema u a un cos am ase sl so e ar o rive sur cuss ano men deien re how mucna asi 8 trec iabe and ho much is mgnufsciving overneadJ (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Enter all amounts as positive values.) 17,000 18.000 13,200 Direct malerial used Direct bb0 Manutactunngvarhaad appled Total curont manufacturing costs Beginning work in process inventany 27,600 7,500 24,000 9.100 5.700 ,000 14,001 Coat of goods manutachared Baginning finishad gocds inwantary Ending frithed goods inventory Cost of gouds sold 7.300 G,S0D 35,000 6,000

Explanation / Answer

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

Total manufacturing cost+Beginning WIP-Ending WIP=cost of goods manufactured

cost of goods manufactured+beginning finished goods inventory-ending finished goods inventory=COGS

For case 3:

Direct labor+Overhead=(27600-13200)=$14400

Labor+1.5Overhead=14400

Hence direct labor=14400/2.5

=$5760

Case 1 Case 2 Case 3 Direct material 17000 4000 13200 Direct labor 18000 8000 5760 Manufacturing overhead 27000 12000 8640 Total maufacturing cost 62000 24000 27600 Beginning WIP 9100 31000 7600 Ending WIP 5700 9000 21199 Cost of goods manufactured 65400 46000 14001 Beginning finished goods inventory 3900 11300 28599 Ending finished goods inventory 7300 21300 6600 COGS 62000 36000 36000

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