Calculate the cost of goods manufactured using the following information:
A) $680,500.
B) $701,900.
C) $687,100.
D) $674,600.
E) $772,600.

Question

Calculate the cost of goods manufactured using the following information: 
A) $680,500. 
B) $701,900. 
C) $687,100. 
D) $674,600. 
E) $772,600.

Quizplus · Accepted Answer

To calculate cost of goods manufactured, we need to add the direct materials used, direct labor, and manufacturing overhead, and subtract the ending work in process inventory from the total cost of work in process inventory.

Direct Materials used = beginning raw materials inventory + purchases of raw materials - ending raw materials inventory 
= $138,000 + $766,000 - $162,000 
= $742,000

Direct Labor = $253,000

Manufacturing Overhead = $562,500

Total Cost of Work in Process Inventory = beginning WIP inventory + total manufacturing costs 
= $326,000 + ($742,000 + $253,000 + $562,500) 
= $1,883,500

Subtract Ending WIP Inventory = $1,883,500 - $1,196,400 
= $687,100

Therefore, the correct option is C, $687,100.

Calculate the Cost of Goods Manufactured Using the Following Information