Dodridge Corporation has provided the following data for February. The beginning balance in the raw materials inventory account was $23,000. During the month, the company made raw materials purchases amounting to $59,000. At the end of the month, the balance in the raw materials inventory account was $33,000. Direct labor cost was $28,000 and manufacturing overhead was $74,000. The beginning balance in the work in process account was $12,000 and the ending balance was $17,000. The beginning balance in the finished goods account was $48,000 and the ending balance was $54,000.
-The cost of goods manufactured for February was:
A) $156,000
B) $146,000
C) $151,000
D) $161,000

Question

Quizplus · Accepted Answer

The formula for cost of goods manufactured is:

Beginning WIP inventory + Total Manufacturing Costs - Ending WIP inventory = Cost of goods manufactured

Beginning WIP inventory: $12,000
Ending WIP inventory: $17,000

Total manufacturing costs:
Direct materials: $23,000 (beginning balance) + $59,000 (purchases) - $33,000 (ending balance) = $49,000
Direct labor: $28,000
Manufacturing overhead: $74,000

Total manufacturing costs: $49,000 + $28,000 + $74,000 = $151,000

Using the formula:
Beginning WIP inventory ($12,000) + Total Manufacturing Costs ($151,000) - Ending WIP inventory ($17,000) = Cost of goods manufactured

$12,000 + $151,000 - $17,000 = $146,000

Therefore, the cost of goods manufactured for February was $146,000, which is option B.

Dodridge Corporation Has Provided the Following Data for February