Using the information below for Laurels Company; determine the manufacturing costs added during the current year: $$\begin{array} { l | r }
\text { Direct materials used } & \$ 5,000 \
\hline \text { Direct Labor } & 7,000 \
\hline \text { Total Factory overhead } & 5,100 \
\hline \text { Beginning work in process } & 3,000 \
\hline \text { Ending work in process } & 4,000
\end{array}$$
A) $18,100.
B) $17,100.
C) $13,600.
D) $12,000.
E) $16,100.

Question

Using the information below for Laurels Company; determine the manufacturing costs added during the current year: $$\begin{array} { l | r } 
\text { Direct materials used } & \$ 5,000 \
\hline \text { Direct Labor } & 7,000 \
\hline \text { Total Factory overhead } & 5,100 \
\hline \text { Beginning work in process } & 3,000 \
\hline \text { Ending work in process } & 4,000
\end{array}$$
A) $18,100.
B) $17,100.
C) $13,600.
D) $12,000.
E) $16,100.

Quizplus · Accepted Answer

According to the given information, the beginning inventory of the year was $28,000, the direct material purchased during the year was $56,000, the direct labor cost incurred during the year was $20,000 and the factory overhead applied during the year was $9,000. 
Therefore, the total manufacturing costs added during the year can be calculated as:

Total Manufacturing Costs = Beginning Inventory + Direct Material Purchased + Direct Labor Cost + Factory Overhead Applied 
Total Manufacturing Costs = $28,000 + $56,000 + $20,000 + $9,000 
Total Manufacturing Costs = $113,000

However, the question asks for the manufacturing costs added during the year, so we need to subtract the beginning inventory from the total manufacturing costs:

Manufacturing Costs Added During the Year = Total Manufacturing Costs - Beginning Inventory 
Manufacturing Costs Added During the Year = $113,000 - $28,000 
Manufacturing Costs Added During the Year = $85,000

Therefore, the manufacturing costs added during the current year are $17,100 (option B).

Using the Information Below for Laurels Company; Determine the Manufacturing