Question

Billings Company's plant manager is trying to better understand his plant's inventory workflow. He determined that $10 million was spent on raw materials, $2 million on direct labor and $3 million on manufacturing overhead. If raw materials beginning and ending inventories are $2 million and $1 million, respectively, and work-in-process beginning and ending inventories are $6 million and $4 million respectively, how much is cost of goods manufactured

Answer 1

The cost of goods manufactured was $18 millions

Step-by-step explanation:

1. raw materials cost.

raw materials beginning $2 millions

(+) raw materials spent $10 millions

(-) raw materials ending $1 milions

Total raw material cost $11 millions

2. work-in-process cost

(+) work in process beginning $ 6 millions

(-) work in process ending ___$ 2 millions

Total work in process cost ____$2 millions

then:

raw material cost $11 millions

work in process cost _ $2 millions

direct labor cost $2 millions

manufacturing overhead cost $ 3 millions

Total $18 millions