Given The Following Information: Manufacturing Overhead Was

Given The Following Informationmanufacturing Overhead Was Applied At

Given the following information: Manufacturing Overhead was applied at a rate of 100 percent of direct labor dollars. Beginning Work in Process Inventory was $6,000. Beginning Finished Goods Inventory was $18,000. During the period, Work in Process Inventory decreased by 20 percent, and Finished Goods Inventory increased by 25 percent. Actual manufacturing overhead costs were $93,000. Sales were $401,000. Adjusted Cost of Goods Sold was $310,000. Find the missing values: Direct Materials used, Direct Labor, Manufactured Overhead Applied, Total Current Manufacturing Costs, plus Beginning WIP Inventory, minus Ending WIP Inventory, and Cost of Goods Manufactured.

Paper For Above instruction

The problem presents a comprehensive scenario involving manufacturing costs, inventory changes, and financial metrics. To solve for the missing values, a systematic approach grounded in cost accounting principles is necessary. This includes understanding inventory flows, manufacturing overhead application, and the relationships among the various components of production costs.

First, it is essential to organize the given information systematically. The starting points include the beginning inventories, the changes during the period, and the known costs. With these, we can establish equations to find the missing variables, especially focusing on direct materials used, direct labor, and manufacturing overhead applied.

Step 1: Establish initial data and variables

• Beginning Work in Process (WIP) Inventory: $6,000
• Beginning Finished Goods Inventory: $18,000
• WIP decreased by 20%
• Finished Goods increased by 25%
• Manufacturing Overhead (MOH) applied at 100% of direct labor dollars
• Actual manufacturing overhead costs: $93,000
• Sales: $401,000
• Adjusted Cost of Goods Sold (COGS): $310,000
• Manufacturing Overhead applied: $86,000

Step 2: Calculate ending inventory balances

The WIP inventory decreased by 20%. The beginning WIP was $6,000; thus, the ending WIP inventory can be calculated as:

Ending WIP = Beginning WIP × (1 - 20%) = $6,000 × 0.80 = $4,800

The Finished Goods inventory increased by 25%. Starting with $18,000, the ending balance is:

Ending Finished Goods = Beginning Finished Goods × (1 + 25%) = $18,000 × 1.25 = $22,500

Step 3: Find total cost of goods manufactured (COGM)

Using the relationship between COGS, beginning inventory, and ending inventory, we have:

Adjusted COGS = Beginning Finished Goods + COGM - Ending Finished Goods

Rearranged to find COGM:

COGM = Adjusted COGS + Ending Finished Goods - Beginning Finished Goods

Plugging in known values:

COGM = $310,000 + $22,500 - $18,000 = $314,500

Step 4: Calculate Total Manufacturing Costs and Other Components

Since:

COGM = Beginning WIP + Total Manufacturing Costs - Ending WIP

Rearranged to find Total Manufacturing Costs:

Total Manufacturing Costs = COGM + Ending WIP - Beginning WIP

Input values:

Total Manufacturing Costs = $314,500 + $4,800 - $6,000 = $313,300

Step 5: Calculate Direct Materials Used and Direct Labor

Total Manufacturing Costs consist of direct materials, direct labor, and manufacturing overhead applied:

Sum of components = Direct Materials + Direct Labor + Manufacturing Overhead

We know Manufacturing Overhead applied is $86,000. We also need to determine direct materials and direct labor.

The equation simplifies with the following relationship:

Total Manufacturing Costs = Direct Materials Used + Direct Labor + Manufacturing Overhead Applied

Hence:

Direct Materials Used + Direct Labor = Total Manufacturing Costs - Manufacturing Overhead Applied = $313,300 - $86,000 = $227,300

Given that manufacturing overhead was applied at 100% of direct labor dollars, the actual manufacturing overhead ($93,000) and applied overhead ($86,000) suggest that some adjustment may be necessary. However, for the purpose of these calculations, direct labor dollars correspond to the applied overhead, which is $86,000.

Therefore, direct labor cost = $86,000

Using this, direct materials used can be calculated as:

Direct Materials Used = $227,300 - Direct Labor = $227,300 - $86,000 = $141,300

Step 6: Summary of findings

• Direct Materials Used: $141,300
• Direct Labor Cost: $86,000
• Manufacturing Overhead Applied: $86,000
• Total Manufacturing Costs: $313,300
• Cost of Goods Manufactured: $314,500

Conclusion

This analysis demonstrates the interplay of inventory levels, manufacturing costs, and financial metrics. By meticulously organizing data and applying fundamental cost accounting formulas, the missing values were derived. Notably, the direct materials used amount stands at approximately $141,300, and direct labor costs tally at $86,000, aligning with manufacturing overhead application and total costs incurred during the period. These calculations facilitate managerial decision-making, costing accuracy, and financial reporting fidelity.

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