Question

The accounting records of falcon company revealed the following information: raw materials used $ 76,000 direct labor 141,000 manufacturing overhead 376,000 work-in-process inventory, 1/1 66,000 finished-goods inventory, 1/1 205,000 work-in-process inventory, 12/31 92,000 finished-goods inventory, 12/31 156,000 falcon's cost of goods manufactured is: multiple choice $567,000. $570,000. $616,000. $619,000. none of the answers is correct.

Answer 1

To determine Falcon Company's Cost of Goods Manufactured, add raw materials used, direct labor, and manufacturing overhead costs, then adjust for the change in work-in-process inventory. The calculation results in a Cost of Goods Manufactured of $567,000 for Falcon Company.

Step-by-step explanation:

To calculate the Cost of Goods Manufactured for Falcon Company, we first add the costs of raw materials, direct labor, and manufacturing overhead to find the total manufacturing costs incurred during the year. Then, we adjust this total by the change in work-in-process inventory from the beginning to the end of the year. We start with the total of raw materials used ($76,000), direct labor ($141,000), and manufacturing overhead ($376,000) and add these together to reach a subtotal. Then, we add the beginning work-in-process inventory and subtract the ending work-in-process inventory to find the Cost of Goods Manufactured.

Raw Materials Used: $76,000

Direct Labor: $141,000

Manufacturing Overhead: $376,000

Total Manufacturing Costs: $76,000 + $141,000 + $376,000 = $593,000

Beginning Work-In-Process Inventory: $66,000

Ending Work-In-Process Inventory: $92,000

Adjustment for Work-In-Process Inventory: $66,000 - $92,000 = $-26,000

Cost of Goods Manufactured: $593,000 + ($66,000 - $92,000) = $567,000

Falcon's Cost of Goods Manufactured is $567,000.