Question

Indigo Company reported the following information for December:

Direct materials $36,000
Direct labor 20,000
Manufacturing overhead 38,000
Beginning work-in-process inventory 23,000
Ending work-in-process inventory 25,000
The cost of goods manufactured in December is:
a. $92,000.
b. $96,000.
c. $102,000.
d. $86,000.

Answer 1

The cost of goods manufactured in December is $92,000.

Step-by-step explanation:

The cost of goods manufactured in December is calculated by adding the direct materials, direct labor, and manufacturing overhead and subtracting the change in work-in-process inventory.

Using the given information:

Direct materials: $36,000

Direct labor: $20,000

Manufacturing overhead: $38,000

Beginning work-in-process inventory: $23,000

Ending work-in-process inventory: $25,000

Cost of goods manufactured = Direct materials + Direct labor + Manufacturing overhead + Beginning work-in-process inventory - Ending work-in-process inventory = $36,000 + $20,000 + $38,000 + $23,000 - $25,000 = $92,000

Therefore, the cost of goods manufactured in December is $92,000 (option a).