Asked by Kathryn Murphy on Jul 21, 2024
Verified
What was the cost of goods manufactured for the period?
A) $122,000
B) $124,000
C) $120,000
D) $138,000
Cost Of Goods Manufactured
The total cost incurred by a company to manufacture its products, including labor, material, and overhead costs, during a specific period.
General & Administrative
Expenses related to the general operation of a company, including salaries of executive personnel, rent, utilities, and office supplies, not directly tied to production.
- Calculate the costs of product manufacturing and the selling price of goods.
Verified Answer
DM
Darcy MorenoJul 25, 2024
Final Answer :
C
Explanation :
Cost of Goods Manufactured (COGM) is calculated as follows:1. **Direct Materials Used** = Beginning Raw Materials + Purchases of Raw Materials - Ending Raw Materials = $18,000 + $28,000 - $19,000 = $27,0002. **Total Manufacturing Costs** = Direct Materials Used + Direct Labor (Baker's Salaries) + Manufacturing Overhead (Indirect Materials + Production Supervisor Salary + Rent on Production Factory + Utilities on Production Factory) = $27,000 + $20,000 + ($17,500 + $21,000 + $19,000 + $17,500) = $122,0003. **Total Work in Process (WIP)** = Beginning WIP + Total Manufacturing Costs - Ending WIP = $19,500 + $122,000 - $21,500 = $120,000Therefore, the cost of goods manufactured for the period is $120,000.
Learning Objectives
- Calculate the costs of product manufacturing and the selling price of goods.