The Juarez Corporation incurred the following transactions during its first year of operations. (Assume all transactions involve cash).
1) Acquired $1,000 of capital from the owners.
2) Purchased $400 of direct raw materials.
3) Used $300 of these direct raw materials in the production process.
4) Paid production workers $400 cash.
5) Paid $200 for manufacturing overhead.
6) Started and completed 200 units of inventory.
7) Sold 50 units at a price of $6 each.
"8) Paid $40 for selling and administrative expenses.
The amount of cost of goods manufactured would be:"
A) $1,000.
B) $900.
C) $800.
D) $600.

Question

Quizplus · Accepted Answer

To calculate the cost of goods manufactured, we need to add up all the costs related to production. These include direct raw materials used, direct labor costs, and manufacturing overhead costs. 
Direct materials used = $300 
Direct labor costs = $400 
Manufacturing overhead costs = $200 
Total cost of goods manufactured = $300 + $400 + $200 = $900. Therefore, the correct answer is B.

The Juarez Corporation Incurred the Following Transactions During Its First