Question

Generic Motors is a manufacturing firm. Its beginning inventory of materials was $1,000, purchases of materials $20,000, ending inventory of materials $1,500.
Its beginning inventory of work-in-process (WIP) was $5,000, ending inventory of WIP was $6,700.

Its cost of direct labor was $12,000, manufacturing overhead $11,000.

Its beginning inventory of finished goods was $3,000, ending inventory of finished goods was $1,300.

Required:
a) What was the cost of materials used?



b) What was the cost of goods manufactured (COGM)?


c) What was the cost of goods sold (COGS)?

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Direct material:

beginning inventory= $1,000

purchases= $20,000

ending inventory= $1,500.

beginning inventory of work-in-process (WIP) was $5,000

ending inventory of WIP was $6,700.

Its cost of direct labor was $12,000, manufacturing overhead $11,000.

Its beginning inventory of finished goods was $3,000, the ending inventory of finished goods was $1,300.

A) Direct material used= beginning inventory + purchases - ending inventory

DM used= 1,000 + 20,000 - 1,500= 19,500

B) cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 5,000 + 19,500 + 12,000 + 11,000 - 6,700= $40,800

C) COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 3,000 + 40,800 - 1,300= $42,500