Question

In September, Lauren Ashley Company purchased materials costing $220,000 and incurred direct labor cost of $150,000.Overhead totaled $310,000 for the month.Information on inventories was as follows:September 1 September 30Materials $140,000 $130,000Work in process $90,000 $70,000Finished goods $60,000 $80,000
1) What was the cost of direct materials used in September ?2) What was the total manufacturing cost in September ?3) What was the cost of goods manufactured for September ?

Answer 1

Answer:

a. $230,000

b. $690,000

c.  $710,000

Explanation:

The computation is shown below:

a. Cost of direct material used = Beginning balance of raw material + purchase made - ending balance of raw material

= $140,000 + $220,000 - $130,000

= $230,000

b. Total manufacturing cost

Total manufacturing cost = cost of direct materials used + direct labor cost + overhead  cost

= $230,000 + $150,000 + $310,000

= $690,000

c. Cost of goods manufactured

Cost of goods manufactured = Beginning balance of Work in process + Manufacturing cost - Ending balance of Work in process

= $90,000 + $690,000 - $70,000

= $710,000