Question

Assuming that the total manufacturing costs are $3,400,000, compute the cost of goods manufactured using the information below.

Raw materials inventory, January 1 $ 30,000

Raw materials inventory, December 31 60,000

Work in process, January 1 27,000

Work in process, December 31 18,000

Finished goods, January 1 60,000

Finished goods, December 31 48,000

Raw materials purchases 1,800,000

Direct labor 890,000

Factory utilities 225,000

Indirect labor 75,000

Factory depreciation 500,000

Operating expenses 630,000

a. $3,421,000.

b. $3,391,000.

c. $3,409,000.

d. $3,142,000.

Answer 1

c. $ 3,409,000

Step-by-step explanation:

Computation of cost of goods manufactured

The cost of goods manufactured is calculated by adjusting the opening and closing work in process balances to the total manufacturing input

Total manufacturing input $ 3,400,000

Add: Opening work in process $ 27,000

Less: Closing work in process $ ( 18,000)

Cost of goods manufactured $ 3,409,000

The cost of goods manufactured is determined by the total of the input and adding the differnce in opening and closing work in process balances.