Question

Manufacturing cost data for Dolan Company, which uses a job order cost system, are presented below:

Case A Case B
Direct Materials Used $ $103,000
Direct Labor 70,000 150,000
Manufacturing Overhead Applied 63,000
Total Manufacturing Costs 240,000
Work in Process, 1/1/17 45,000
Total Cost of Work in Process 300,000
Work in Process, 12/31/17 40,000
Cost of Goods Manufactured 205,000

Required:
Indicate the missing amount. Assume that overhead is applied on the basis of direct labor cost and that the rate is the same for both cases.

Answer 1

See answers below

Step-by-step explanation:

Case A.

a + $70,000 + $73,000 = $240,000

a = $107,000

$240,000 + (b) = $300,000

b= $60,000

$300,000 - (c) = $205,000

c = $95,000

Case B

Since over head rate from Case A is 90%, [$63,000 ÷ $70,000]

150,000 × 90% = (d)

(d) = $135,000

$103,000 + $150,000 + $135,000 = (e)

(e) = $388,000

$388,000 + $45,000 = (f)

(f) = $433,000

$433,000 - $40,000 = (g)

(g) = $393,000