Question

The following information is available for Elliot Company. January 1, 2016 2016 December 31, 2016 Raw materials inventory $26,000 $30,000 Work in process inventory 18,500 22,200 Finished goods inventory 30,000 21,000 Materials purchased $170,000 Direct labor 230,000 Manufacturing overhead 180,000 Sales 800,000 Compute cost of goods manufactured.

Answer 1

$572,300

Step-by-step explanation:

Given that,

January 1, 2016 December 31, 2016

Raw materials inventory = $26,000 $30,000

Work in process inventory = 18,500 22,200

Finished goods inventory = 30,000 21,000

Materials purchased = $170,000

Direct labor = $230,000

Manufacturing overhead = $180,000

Sales = $800,000

Total raw material available to use:

= Raw materials inventory at January 1, 2016 + Materials purchased

= $26,000 + $170,000

= $196,000

Direct material used:

= Total raw material available to use - Raw materials inventory at December 31, 2016

= $196,000 - $30,000

= $166,000

Total manufacturing cost:

= Direct material used + Direct labor + Manufacturing overhead

= $166,000 + $230,000 + $180,000

= $576,000

Cost of goods manufactured:

= Total manufacturing cost + Beginning WIP inventory - Closing WIP inventory

= $576,000 + $18,500 - $22,200

= $572,300