Manufacturing costs for Davenport Company during 2018 were as follows: Beginning Finished Goods, 1/1/18 $ 24,400 Beginning Raw M

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3 years ago

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Manufacturing costs for Davenport Company during 2018 were as follows: Beginning Finished Goods, 1/1/18 $ 24,400 Beginning Raw M

aterials, 1/1/18 35,800 Beginning Work in Process, 1/1/18 110,600 Direct Labor for 2018 275,600 Ending Finished Goods, 12/31/18 22,700 Ending Raw Materials, 12/31/18 40,400 Ending Work in Process, 12/31/18 120,900 Material Purchases for 2018 304,500 (including $16,500 of indirect material) Required:
1. Compute direct material used. 2. Compute applied overhead if the company applies overhead at a rate of 0.78 (78%) of direct labor cost. 3. Compute total manufacturing cost. 4. Compute cost of goods manufactured. 5. Compute cost of goods sold.

Business

1 answer:

Nadya [2.5K] · Answer 1 · 2022-03-01T16:52:40+03:00

Answer:

1. $283,400

2. $214,968

3. $790,468

4. $780,168

5. $781,868

Explanation:

Material used = Beginning Materials + Purchases - Ending Materials

= $35,800 + $304,500 - $40,400

= $299,900

Then,

<em>Direct Materials Used = Total Materials Used - Indirect Material</em>

= $299,900 - $16,500

= $283,400

Applied overhead = Application Rate × Actual Activity

= 78% × $275,600

= $214,968

Calculation of Total Manufacturing Costs

Direct Materials $283,400

Direct Labor $275,600

Overheads Applied $214,968

Indirect Materials $16,500

Total Manufacturing Costs $790,468

Cost of Goods Manufactured = Beginning Work in Process Inventory + Manufacturing Costs - Ending Work in Process Inventory

= $110,600 + $790,468 - $120,900

= $780,168

Cost of goods sold = Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory

= $ 24,400 + $780,168 - $22,700

= $781,868