Question

The RacingStripe Company uses job order costing and began the period with a balance of $13,000 in its work-in-process (WIP) account. During the period the company incurred $16,000 in direct labor costs, requisitioned $10,000 in direct materials, and applied $17,000 in manufacturing overhead. Actual overhead costs for the period were $18,500. If the balance in the WIP account at the end of the period was $22,000 then cost of goods manufactured for the period was:

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Answer 1

To calculate the Cost of Goods Manufactured (COGM) for RacingStripe Company, we added the beginning balance of Work-in-Process ($13,000), direct labor costs ($16,000), direct materials costs ($10,000), and applied manufacturing overhead ($17,000), then subtracted the ending WIP balance ($22,000) for a total COGM of $34,000.

Step-by-step explanation:

To calculate the Cost of Goods Manufactured (COGM) for the period for the RacingStripe Company, which uses job order costing, we need to consider the beginning balance of the Work-in-Process (WIP) account, the direct costs added during the period, and the ending balance of WIP. We start with the beginning WIP balance of $13,000, add the direct labor costs of $16,000, and the direct materials costs of $10,000. We also need to add the applied manufacturing overhead of $17,000. This sum gives us the total manufacturing costs for the period. Then, we subtract the ending WIP balance of $22,000 to determine the COGM.

Here is the step-by-step calculation:

• Beginning WIP: $13,000
• + Direct Labor: $16,000
• + Direct Materials: $10,000
• + Applied Overhead: $17,000
• = Total Manufacturing Costs: $56,000
• - Ending WIP: $22,000
• = Cost of Goods Manufactured: $34,000

Thus, the COGM for the period is $34,000, which represents the total manufacturing costs incurred on goods that were finished during the period.