Answer:
cost of goods manufactured= $890,000
Explanation:
Giving the following information:
Applied Overhead= $485,000
Other costs incurred:
Purchases of raw materials (both direct and indirect) - $400,000
Direct labor costs - $60,000
Inventories:
Raw materials, beginning - $20,000
Raw materials, ending - $30,000
Work in process, beginning - $40,000
Work in process, ending - $70,000
<u>To calculate the cost of goods manufactured, we need to use the following formula:</u>
cost of goods manufactured= beginning WIP + direct materials used + direct labor + allocated manufacturing overhead - Ending WIP
Direct material used= beginning inventory + purchases - ending inventory
Direct material used= 20,000 + (400,000 - 15,000) - 30,000
Direct material used= 375,000
I deduct the indirect material included in manufacturing overhead.
cost of goods manufactured= 40,000 + 375,000 + 60,000 + 485,000 - 70,000
cost of goods manufactured= $890,000
