E2-4 Manufacturing cost data for Copa Company, which uses a job order cost system,
are presented below.
Case A Case B Case C
Direct materials used $ (a) $ 83,000 $ 63,150
Direct labor 50,000 100,000 (h)
Manufacturing overhead applied 42,500 (d) (i)
Total manufacturing costs 165,650 (e) 250,000
Work in process 1/1/05 (b) 15,500 18,000
Total cost of work in process 201,500 (f) (j)
Work in process 12/31/05 (c) 11,800 (k)
Cost of goods manufactured 192,300 (g) 262,000
Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is the same.
This is not difficult if you can understand the relationships among these accounts and amounts. If you look in your textbook, you will probably see a Schedule of Cost of Goods Manufactured that will help you with this.
For one thingL
+ direct labor
+ manufacturing overhead
equals total manufacturing costs,
so to solve for A you just need to put your problem in the correct format and solve for direct materials by subtracting dl and moh from total manu costs.
Then, for b, ...
This solution explains the job costing calculations with reasoning in 393 words. Complete calculations are provided in an attached Excel file.