Question

Which of the following represents the correct formula for calculating cost of goods manufactured?

A) Direct materials used + direct labor + factory overhead + beginning work in process + ending work in process.

B) Direct materials used + direct labor + factory overhead + beginning work in process - ending work in process.

C) Direct materials used + direct labor + factory overhead - beginning work in process + ending work in process.

D) Direct materials used + direct labor + factory overhead - beginning work in process - ending work in process.

E) Direct materials used + direct labor - factory overhead + beginning work in process - ending work in process.

Answer 1

The correct formula for calculating the cost of goods manufactured is A) Direct materials used + direct labor + factory overhead + beginning work in process + ending work in process.

Step-by-step explanation:

The cost of goods manufactured (COGM) is the total production cost incurred during the manufacturing process. It includes direct materials, direct labor, and manufacturing overhead. COGM is calculated by summing these costs, providing insights into the expenses associated with the production of goods within a specific time frame.

The correct formula for calculating the cost of goods manufactured is A) Direct materials used + direct labor + factory overhead + beginning work in process + ending work in process. This formula takes into account the direct materials used, direct labor costs, factory overhead costs, as well as the beginning and ending work in process inventory. By adding these components together, you can determine the total cost of goods manufactured.