How is the cost of goods manufactured calculated?
A)beginning WIP + direct materials used + direct labour + manufacturing overhead + ending WIP
B)direct materials used + direct labour + manufacturing overhead - beginning WIP + ending WIP
C)beginning WIP + direct materials used + direct labour + manufacturing overhead - ending WIP
D)direct materials used + direct labour + manufacturing overhead - ending WIP - beginning WIP

Question

Quizplus · Accepted Answer

The cost of goods manufactured is calculated by adding up the costs incurred in the production process, including beginning work in process, direct materials used, direct labor, and manufacturing overhead, and then subtracting ending work in process. Therefore, the correct formula is beginning WIP + direct materials used + direct labour + manufacturing overhead - ending WIP, which is option C.

How Is the Cost of Goods Manufactured Calculated