The following accounts are from last year's books at Sharp Manufacturing: Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of cost of goods manufactured for the year?
A)$255,000
B)$251,000
C)$223,000
D)$226,000

Question

The following accounts are from last year's books at Sharp Manufacturing:      Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of cost of goods manufactured for the year?
A)$255,000 
B)$251,000 
C)$223,000 
D)$226,000

Quizplus · Accepted Answer

To calculate the cost of goods manufactured, we need to add up the total manufacturing costs of all jobs completed during the year. From the information given, we can see that we have five different job numbers. To calculate the total manufacturing costs, we need to know the direct labor costs of each job. Unfortunately, this information is not given in the problem. Therefore, we cannot calculate the exact cost of goods manufactured. However, we can make an estimate based on the information given. The total cost of goods sold for the year is $265,000. This means that the cost of goods manufactured must be less than this amount (because we add finished goods inventory to the cost of goods manufactured to get cost of goods sold). Therefore, the only answer option that is less than $265,000 is B) $251,000. Therefore, we choose B as the answer.

The Following Accounts Are from Last Year's Books at Sharp