Question

Consider Derek's budget information: materials to be used totals $64,300; direct labor totals $198,400; factory overhead totals $402,900; work in process inventory January 1 is $187,800; and work in progress inventory on December 31 is $194,100. The budgeted cost of goods manufactured for the year is

Answer 1

$659300

Step-by-step explanation:

Given: Total material used= $64300.

Direct labor= $198400.

Factory overhead= $402900.

Beginning work in progress= $187800.

Ending work in progress inventory= $194100.

Now, calculating the budgeted cost of goods manufactured.

Budgeted cost of goods manufactured=
`(Total\ manufacturing\ cost+ beginning\ work\ in\ progress\ inventory)- ending\ WIP\ inventory`⇒ Budgeted cost of goods manufactured=
`(\$ 64300+\$ 198400+\$ 402900+\$ 187800)- \$ 194100`

⇒ Budgeted cost of goods manufactured=
`\$ 853400 -\$ 194100`

∴ Budgeted cost of goods manufactured=
`\$ 659300`

Hence, the budgeted cost of goods manufactured for the year is $659300.