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The following information was obtained from the records of Appleton Corporation during 2016. Manufacturing Overhead was applied at a rate of 100 percent of direct labor dollars. Beginning value of inventory follows: Beginning Work in Process Inventory, $8,000. Beginning Finished Goods Inventory, $16,000 During the period, Work in Process Inventory decreased by 20 percent, and Finished Goods Inventory increased by 25 percent. Actual manufacturing overhead costs were $86,000. Sales were $416,000 Adjusted Cost of Goods Sold was $320,000. Required: Use the preceding information to find the missing values in the following table:
Expert Answer
| Item | Amount | ||||
| Direct Material used | $ 1,53,400 | ||||
| Direct Labour | $ 83,000 | ||||
| Manufacturing overhead applied | $ 83,000 | ||||
| Total current Manufacturing costs | $ 3,19,400 | ||||
| Plus:Beginning Work in process Inventory | $ 8,000 | ||||
| Less:Ending Work in process Inventory | $ 6,400 | ||||
| Cost of goods manufactured | $ 3,21,000 | ||||
| Plus:Beginning finished goods Inventory | $ 16,000 | ||||
| Less:Ending finished goods Inventory | $ 20,000 | ||||
| Unadjusted cost of goods sold | $ 3,17,000 | ||||
| Overhead Adjsutments | $ 3,000 | ||||
| Adjsuted cost of goods sold | $ 3,20,000 | ||||
| Workings: | |||||
| a. Overhead Adjustments | |||||
| Manufacturing overhead applied | $ -83,000 | ||||
| Actual Manufacturing Overhead | $ 86,000 | ||||
| Overhead Adjustments | $ 3,000 | ||||
| (Underapplied) | |||||
| b.Unadjsuted cost of goods sold | |||||
| Adjsuted cost of goods sold | $ 3,20,000 | ||||
| Overhead Adjustments | $ -3,000 | ||||
| Unadjsuted cost of goods sold | $ 3,17,000 | ||||
| c. Ending Finished goods Inventory | |||||
| Ending Finished goods Inventory | = | Beginning Finished goods inventoryx(1+0.25) | |||
| = | $ 16,000 | x | (1+0.25) | ||
| = | $ 20,000 | ||||
| d. Ending Work in process Inventory | |||||
| Ending Work in process Inventory | = | Ending Work in process Inventoryx(1-0.20) | |||
| = | $ 8,000 | x | (1-0.20) | ||
| = | $ 6,400 | ||||
| e.Cost of goods manufactured | |||||
| Unadjusted cost of goods sold | $ 3,17,000 | ||||
| Ending finished goods Inventory | $ 20,000 | ||||
| Beginning finished goods Inventory | $ -16,000 | ||||
| Cost of goods manufactured | $ 3,21,000 | ||||
| f.Total current Manufacturing costs | |||||
| Cost of goods manufactured | $ 3,21,000 | ||||
| Ending Work in process Inventory | $ 6,400 | ||||
| Beginning Work in process Inventory | $ -8,000 | ||||
| Total current Manufacturing costs | $ 3,19,400 | ||||
| g. Direct Labour | |||||
| Manufacturing Overhead applied | = | Direct Labour costs x 100% | |||
| $ 83,000 | = | Direct Labour costs x 100% | |||
| Direct Labour costs | = | $ 83,000 | / | 100% | |
| or, | |||||
| Direct Labour costs | = | $ 83,000 | |||
| h.Direct Material used | |||||
| Total current Manufacturing costs | $ 3,19,400 | ||||
| Manufacturing overhead applied | $ -83,000 | ||||
| Direct Labour | $ -83,000 | ||||
| Direct Material used | $ 1,53,400 | ||||
