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
To find the answers to each item in the schedule, we need to analyze the given information step by step. Let's go through each item:
1. Direct Materials used in production:
Direct materials used in production can be calculated using the formula:
Direct Materials Used = Beginning Inventory of Raw Materials + Purchases of Raw Materials - Ending Inventory of Raw Materials
Unfortunately, we do not have information about the raw material inventory. To complete this schedule, we need additional information.
2. Direct Labor:
Direct labor cost is not provided in the given information. Without this information, we cannot calculate direct labor cost. We need additional information.
3. Manufacturing Overhead Applied:
Manufacturing overhead applied is given as $180,000. This value is the amount of manufacturing overhead allocated to production based on a predetermined rate. We know that the predetermined rate for manufacturing overhead applied to production is 150% of direct labor cost. Therefore, to find the direct labor cost, we can use the formula:
Direct Labor Cost = Manufacturing Overhead Applied / 150%
4. Current Manufacturing Costs:
a. Beginning Work in Process Inventory is given as $20,000.
b. Ending Work in Process Inventory is given as $24,000.
5. Costs of Goods Manufactured:
a. Beginning Finished Goods Inventory is given as $42,000.
b. Ending Finished Goods Inventory is given as $39,000.
6. Unadjusted Cost of Goods Sold:
Unadjusted Cost of Goods Sold can be calculated using the following formula:
Unadjusted Cost of Goods Sold = Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory
7. Overhead Adjusted:
To find the overhead adjusted value, we need to compare the actual manufacturing overhead with the applied manufacturing overhead. The difference between the two is the overhead variance.
Overhead Variance = Actual Manufacturing Overhead - Manufacturing Overhead Applied
Overhead Adjusted = Unadjusted Cost of Goods Sold + Overhead Variance
8. Adjusted Cost of Goods Sold:
Adjusted Cost of Goods Sold is the final value we need to find. It is the Overhead Adjusted value.
Unfortunately, we do not have all the required information to complete this schedule. Direct materials used in production and direct labor cost are missing, and these values are crucial in completing the schedule. Without those values, we cannot calculate the remaining items.