Question

Deer Lake Inc. uses a job order costing system with manufacturing overhead applied to products at a rate of 150% of direct labor cost. Treating each case independently, find the missing amounts (Input all amounts as positive values.):

Answer 1

Solution and Explanation:

Direct Material that is Used  = 20,000.00

Direct Labor used  = 25,000.00

Manufacturing Overhead Applied (150% multiply with DIrect Labor)  37,500.00

Total Manufacturing Cost ( DIrect Material + Direct Labor + Manufacturing Overhead)  82,500.00

Add: Beginning Work In Progress  10,000.00

Less :Ending Work In Progress  8,000.00

Cost of Goods Manufactured  84,500.00

Add: Beginning Finished Goods  12,000.00

Less :Ending Finished Goods  15,500.00

Cost of Goods sold (unadjusted)  81,000.00

Thus, the unadjusted COGS is $81000