Question

Given the following information, determine the cost of goods manufactured and the cost of goods sold for the year ended December 31, 20X9.
Direct labor incurred $126,000
Manufacturing overhead incurred 359,000
Direct materials used 271,000
Finished goods inventory, 1/1/20X9 395,000
Finished goods inventory, 12/31/20X9 442,000
Work in process inventory, 1/1/20X9 193,000
Work in process inventory, 12/31/20X9 218,000

Answer 1

Answer:

$731,000 and $684,000

Explanation:

The computations are shown below:

For cost of goods manufactured    

= Direct materials used + Direct labor cost + Manufacturing overhead incurred + opening work-in-process inventory - closing work-in-process inventory    

= $271,000 + $126,000 + $359,000 + $193,000 - $218,000

= $731,000

For cost of goods sold

= Opening finished goods Inventory + Cost of goods manufactured - Ending finished goods Inventory

= $395,000 + $731,000 - $442,000

= $684,000