Answer:
COGM = 450,000
Explanation:
The amount debited will be equal to the COGM which is the cost of goods manufactured.
COGM = beginnning WIP + cost added - ending WIP
<u>we need to know the cost added during the period:</u>
cost added during the period
materials 140,000
direct labor 160,000
overhead applied
18 x 10,000 = <u> 180,000 </u>
total 480,000
Notice, for the overhead we multiply the predetermined rate by the amount of labor hours.
The actual values and adjustment for application of overhead are calculate later at year-end
Now, we are given the following information:
<u>we know that WIP increase by 30,000</u>
so : ending is 30,000 dollars greater than beginning
which implies ending - beginning = -30,000
we plug that into the formula:
COGM = cost added + (beginning WIP - ending WIP)
COGM = 480,000 - 30,000
COGM = 450,000
