Question

Summit Manufacturing had $10,000 of direct materials on hand at the beginning of the year and $9,000 on hand at the end of the year. During the year, the company purchased $42,000 of direct materials, and incurred $22,000 of direct labor and $17,000 of manufacturing overhead. The company had $26,000 of inventory in Work-in-Process Inventory at the beginning of the year and $12,000 at the end of the year. What is the cost of goods manufactured for the year?

Answer 1

The cost of goods manufactured for the year is $96,000.

Step-by-step explanation:

Direct material used = Beginning direct material inventory + direct material purchased - Ending direct material inventory

= $10,000 + $42,000 - $9,000

= $43,000

Cost of goods manufactured = Manufacturing costs incurred in the current accounting period + beginning work-in-process inventory - ending work-in-process inventory.

= direct materials used + direct labor used + manufacturing overhead assigned + beginning work-in-process inventory - ending work-in-process inventory

= $43,000 + $22,000 + $17,000 + $26,000 - $12,000

= $96,000

Therefore, The cost of goods manufactured for the year is $96,000.