Question

A corporation used $35,000 of direct materials and incurred $73,000 in direct labor cost, and $112,500 in manufacturing overhead costs during the period. What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $28,000 and $21,500, respectively?
A. $248,500

B. $227,000

C. $214,000

D. $220,500

Answer 1

Answer:

B. $ 227,000

Explanation:

The cost of goods manufactured is calculated by the following equation:

Opening Work in Process + Direct Material + Direct Labour + Manufacturing Overhead - Closing Work in Process

Direct Materials                                       $   35.000

Direct Labour                                           $   73,000

Manufacturing OH                                   $  112,500

Total Manufacturing Costs incurred   $  220.500

Add: Opening work in process             $    28,000

Less: Closing work in process              $ (   21,500)

Cost of Goods Manufactured               $    227,000