Question

Beginning inventory cost $2,000. The factory put $10,000 worth of direct materials into production and spent $5,000 on direct labor and another $4,000 on overhead. At the end of the year, you counted $3,000 worth of ending inventory. What is the cost of goods manufactured?

Answer 1

$18,000

Step-by-step explanation:

Beginning inventory is $2000

Purchased during inventory is $10,000+$5,000+$4,000= $19,000

Ending inventory is $3000

Therefore the cost of goods manufactured can be calculated as follows.

= $2,000+$19,000-$3,000

= $21,000-$3,000

= $18,000

Hence the cost of goods manufactured is $18,000