Rams Company purchased $34,000 of direct materials and incurred $9,600 of direct labor costs during the year. Indirect labor amounted to $1,000, while indirect materials totaled $1,200. Other operating expenses pertaining to the factory included utilities of $1,280, maintenance of $1,840, supplies of $720, depreciation of $6,040, and property taxes of $1,160. The only inventory was $2,720 of finished goods at year end. The cost of goods manufactured is:
A) $69,000
B) $50,800
C) $56,840
D) $45,800

Question

Quizplus · Accepted Answer

The cost of goods manufactured includes direct materials, direct labor, and manufacturing overhead. Direct materials are $34,000, direct labor is $9,600, and manufacturing overhead includes indirect labor ($1,000), indirect materials ($1,200), utilities ($1,280), maintenance ($1,840), supplies ($720), depreciation ($6,040), and property taxes ($1,160). Adding these gives $56,840.

Rams Company Purchased $34,000 of Direct Materials and Incurred $9,600