Question

Cost data for D5-6b Company for the most recent year appears below: Direct labor ....................................... $138,000 Insurance on the factory building .................. $ 22,000 Indirect materials ................................. $ 53,000 Sales commissions .................................. $ 80,000 Factory supervisor's salary ........................ $ 64,000 Depreciation on copier in the sales office ......... $ 21,000 Property tax on the factory building ............... $ 13,000 Wages paid to factory janitors ..................... $ 40,000 Advertising ........................................ $ 46,000 CEO's Salary ....................................... $149,000 Utilities on the factory ........................... $ 37,000 D5-6b Company reported the following inventory balances during the most recent year: January 1 December 31 Direct materials $82,000 $68,000 Work in process $27,000 $44,000 Finished goods $91,000 $51,000 During the most recent year, D5-6b Company purchased direct materials totaling $148,000 and reported sales revenue of $500,000. Calculate D5-6b Company's cost of goods manufactured for the most recent year.

Answer 1

Answer:

cost of goods manufactured= $512,000

Explanation:

First, we need to calculate the direct materials used, direct labor, and manufacturing overhead:

Direct material= 82,000 + 148,000 - 68,000= $162,000

Direct labor= 138,000

Overhead= Insurance on the factory building + Indirect materials +  Factory supervisor's salary + Property tax on the factory building + Wages paid to factory janitors + Utilities on the factory

Overhead= 22,000 + 53,000 + 64,000 + 13,000 + 40,000 + 37,000

Overhead= $229,000

Now, to calculate the cost of goods manufactured, we need to use the following formula:

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

cost of goods manufactured= 27,000 + 162,000 + 138,000 + 229,000 - 44,000

cost of goods manufactured= $512,000