Oscar Corp. applies manufacturing overhead to production at 150% of direct labor cost. During 20x5, manufacturing overhead of $180,000 was applied to production; actual manufacturing overhead was $199,000. Beginning Work in Process Inventory was $20,000 and ending Work in Process Inventory was $24,000. Beginning Finished Goods Inventory was $42,000, ending Finished Goods Inventory was $39,000. Sales for 20x5 were $580,000, yielding a $117,000 gross profit.
Complete the following schedule:
1. Direct Materials used in production.
2. Direct Labor.
3. Manufacturing Overhead Applied.
4. Current Manufacturing Costs.
a. beginning work in process inventory.
b. ending work in process inventory.
5. Costs of Goods Manufacturing.
a. beginning finished goods inventory.
b. ending finished goods inventory.
6. Unadjusted cost of goods sold.
7. Overhead Adjusted
8. Adjusted cost of goods sold
1. Direct Materials used in production: Unfortunately, I can't come up with a witty response for this one. Direct materials used in production can be calculated by subtracting the beginning inventory of materials from the ending inventory and adding the cost of any additional materials purchased. So, grab a calculator and get crunching!
2. Direct Labor: Well, you know what they say, "The only time success comes before work is in the dictionary." Direct labor is the cost of the workforce actually involved in the production process. Time to pay those hard-working employees!
3. Manufacturing Overhead Applied: Ah, manufacturing overhead, the sneaky expense that can really add up. In this case, it is applied at 150% of the direct labor cost. So, take that direct labor cost and multiply it by 150% to get the manufacturing overhead applied.
4. Current Manufacturing Costs:
a. Beginning Work in Process Inventory: The beginning work in process inventory is the value of partially completed goods at the start of the period. Take a good look at what's on your plate and determine the value of that work in process inventory.
b. Ending Work in Process Inventory: And at the end of the period, you've made progress! Calculate the value of the work in process inventory that you have left.
5. Costs of Goods Manufactured:
a. Beginning Finished Goods Inventory: Now, let's dig into the finished goods! The beginning finished goods inventory represents the value of completed goods at the start of the period. Give it a good shake and calculate the value.
b. Ending Finished Goods Inventory: As you make sales, the finished goods inventory decreases. Calculate the value of finished goods inventory that you have left at the end of the period.
6. Unadjusted cost of goods sold: Ah, the cost of doing business. The unadjusted cost of goods sold is calculated by adding the costs of goods manufactured to the beginning finished goods inventory and subtracting the ending finished goods inventory.
7. Overhead Adjusted: Let's not forget about that sneaky manufacturing overhead. To get the overhead adjusted cost of goods sold, add the actual manufacturing overhead to the unadjusted cost of goods sold.
8. Adjusted cost of goods sold: And voila! The adjusted cost of goods sold is calculated by subtracting the gross profit from the overhead adjusted cost of goods sold. And now, you have your final answer!
Well, I hope I could assist you with my not-so-funny, but hopefully helpful, response. Good luck with your calculations!
To complete the schedule, we can calculate each item step-by-step:
1. Direct Materials used in production: This information is not provided, so we cannot calculate it.
2. Direct Labor: This information is not provided, so we cannot calculate it.
3. Manufacturing Overhead Applied: Given that manufacturing overhead is applied to production at 150% of direct labor cost, we need to calculate the direct labor cost first. Since the direct labor cost is not provided, we cannot calculate this either.
4. Current Manufacturing Costs:
a. Beginning Work in Process Inventory: $20,000 (given)
b. Ending Work in Process Inventory: $24,000 (given)
5. Costs of Goods Manufacturing:
a. Beginning Finished Goods Inventory: $42,000 (given)
b. Ending Finished Goods Inventory: $39,000 (given)
6. Unadjusted Cost of Goods Sold: To calculate the unadjusted cost of goods sold, we need to add the cost of goods manufactured to the beginning finished goods inventory and subtract the ending finished goods inventory.
Unadjusted Cost of Goods Sold = Beginning Finished Goods Inventory + Costs of Goods Manufactured - Ending Finished Goods Inventory
7. Overhead Adjusted: The overhead is overapplied if the actual overhead is less than the overhead applied. If the actual overhead is greater, the overhead is underapplied. To calculate the overhead adjusted, we need to determine if there is any overapplied or underapplied overhead.
Overhead Adjusted = Unadjusted Cost of Goods Sold - Overapplied/Underapplied Overhead
8. Adjusted Cost of Goods Sold: The adjusted cost of goods sold takes into account the overhead adjustment.
Adjusted Cost of Goods Sold = Unadjusted Cost of Goods Sold + Overapplied/Underapplied Overhead
Unfortunately, without the provided information on direct materials used in production and direct labor costs, we cannot complete the entire schedule.
To complete the schedule, we need to calculate the following information:
1. Direct Materials used in production:
To calculate the direct materials used in production, we need to know the change in raw materials inventory. Unfortunately, the information provided does not include the raw materials inventory data. It is not possible to calculate this without that information.
2. Direct Labor:
The question does not provide direct labor cost. We cannot calculate this without knowing the direct labor cost.
3. Manufacturing Overhead Applied:
The manufacturing overhead applied is given as $180,000. This is the amount of overhead applied to production based on a rate of 150% of the direct labor cost.
4a. Beginning Work in Process (WIP) Inventory:
Beginning WIP Inventory is given as $20,000. This represents the work in process at the start of the year.
4b. Ending Work in Process (WIP) Inventory:
Ending WIP Inventory is given as $24,000. This represents the work in process at the end of the year.
5a. Beginning Finished Goods Inventory:
Beginning Finished Goods Inventory is given as $42,000. This represents the finished goods inventory at the start of the year.
5b. Ending Finished Goods Inventory:
Ending Finished Goods Inventory is given as $39,000. This represents the finished goods inventory at the end of the year.
6. Unadjusted Cost of Goods Sold:
To calculate the unadjusted cost of goods sold, we need to know the total manufacturing costs, including direct materials, direct labor, and manufacturing overhead applied. Unfortunately, we do not have enough data to calculate this.
7. Overhead Adjusted:
To calculate the overhead adjusted, we need to know the actual manufacturing overhead incurred. The question provides actual manufacturing overhead of $199,000.
8. Adjusted Cost of Goods Sold:
To calculate the adjusted cost of goods sold, we need to add the overhead adjustment to the unadjusted cost of goods sold. Unfortunately, we do not have enough data to calculate this.
In summary, we do not have enough information to complete the whole schedule. Without the data for direct materials used in production and direct labor cost, we cannot calculate several key figures, such as the unadjusted cost of goods sold and the adjusted cost of goods sold.