Answer:
<u>For Case 1:</u>
Manufacturing overhead applied = 27,000
Total current manufacturing costs = 60,000
Cost of goods manufactured = 64,000
Cost of goods sold = 61,100
<u>For Case 2:</u>
Direct labor = 7,667
Direct material used = 8,333
Beginning work in process inventory = 26,400
Ending finished goods inventory = 15,000
<u>For Case 3:</u>
Direct labor = 5,760
Manufacturing overhead applied = 8,640
Ending work in process inventory = 10,499
Beginning finished goods inventory = 16,199
Explanation:
Note: The data in the question are merged together. The data are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
Also note: See the attached excel file for the table with the computed figure in bold red color.
In the attached excel file, the following calculations are employed:
<u>For Case 1:</u>
Since overhead applied to products at a rate of 150 percent of direct labor cost, we have:
Manufacturing overhead applied = Direct labor * 150% = 18,000 * 150% = 27,000
Total current manufacturing costs = Direct material used + Direct labor + Manufacturing overhead applied = 15,000 + 18,000 + 27,000 = 60,000
Cost of goods manufactured = Total current manufacturing costs + Beginning work in process inventory - Ending work in process inventory = 60,000 + 9,900 - 5,900 = 64,000
Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = 64,000 + 4,700 - 7,600 = 61,100
<u>For Case 2:</u>
Since overhead applied to products at a rate of 150 percent of direct labor cost, we have:
Direct labor = (Manufacturing overhead applied / 150%) * 100% = (11,500 / 150%) * 100% = 7,667
Direct material used = Total current manufacturing costs - Manufacturing overhead applied - Direct labor = 27,500 - 11,500 - 7,667 = 8,333
Beginning work in process inventory = Cost of goods manufactured + Ending work in process inventory - Total current manufacturing costs = 44,000 + 9,900 - 27,500 = 26,400
Ending finished goods inventory = Cost of goods manufactured + Beginning finished goods inventory - Cost of goods sold = 44,000 + 12,000 – 41,000 = 15,000
<u>For Case 3:</u>
Since overhead applied to products at a rate of 150 percent of direct labor cost, we can let:
Direct labor = x
Therefore, we have:
Manufacturing overhead applied = x * 150%
Since,
Total current manufacturing costs = Direct material used + Direct labor + Manufacturing overhead applied ……………………….. (1)
Where;
Total current manufacturing costs = 28,500
Direct material used = 14,100
We can therefore substitute the relevant values into equation (1) and solve for x as follows:
28,500 = 14,100 + x + 1.5x
28,500 - 14,100 = 2.5x
14,400 = 2.5x
x = 14,400 / 2.5
x = 5,760
Therefore;
Direct labor = x = 5,760
and
Manufacturing overhead applied = x * 150% = 5,760 * 150% = 8,640
Ending work in process inventory = Total current manufacturing costs + Beginning work in process inventory - Cost of goods manufactured = 28,500 + 8,000 - 26,001 = 10,499
Beginning finished goods inventory = Cost of goods sold + Ending finished goods inventory - Cost of goods manufactured = 36,000 + 6,200 - 26,001 = 16,199
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