Question

Information from the records of Chrome Ponies Enterprises for June 2018 is as follows:

a) Sales $41,000
b) Direct Labor $10,000
c) Selling and admin. expenses $7,000
d) Direct materials purchases $5,600
e) Factory overhead $13,500
Inventories
a) June 1, 2018 June 30, 2018
b) Direct materials $1,200 $1,300
c) Work in process $2,500 $2,800
d) Finished goods $2,300 $1,900
Chrome Ponies Enterprises' cost of goods manufactured in June is
a) $29,300
b) $28,700
c) $29,200
d) $29,100

Answer 1

The cost of goods manufactured for Chrome Ponies Enterprises in June 2018 is $29,800.

Step-by-step explanation:

The cost of goods manufactured is calculated by adding the direct materials used, direct labor, and factory overhead to the beginning work in process inventory, and then subtracting the ending work in process inventory.

Cost of goods manufactured = Beginning Work in Process Inventory + Direct Materials Used + Direct Labor + Factory Overhead - Ending Work in Process Inventory

Using the given information, the cost of goods manufactured for Chrome Ponies Enterprises in June 2018 is:

Cost of goods manufactured = $2,500 + $5,600 + $10,000 + $13,500 - $2,800 = $29,800