Question

A corporation used $35,000 of direct materials and incurred $73,000 in direct labor cost, and $112,500 in manufacturing overhead costs during the period. What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $28,000 and $21,500, respectively?

A. $248,500

B. $227,000

C. $214,000

D. $220,500

Answer 1

B. $ 227,000

Step-by-step explanation:

The cost of goods manufactured is calculated by the following equation:

Opening Work in Process + Direct Material + Direct Labour + Manufacturing Overhead - Closing Work in Process

Direct Materials $ 35.000

Direct Labour $ 73,000

Manufacturing OH $ 112,500

Total Manufacturing Costs incurred $ 220.500

Add: Opening work in process $ 28,000

Less: Closing work in process $ ( 21,500)

Cost of Goods Manufactured $ 227,000