Use the information below to answer the following question(s).Montreal Industries Inc.had the following activities during the year:

-What is Montreal's cost of goods manufactured during the year?
A)$268,000
B)$248,000
C)$240,000
D)$238,000
E)$260,000

Question

Use the information below to answer the following question(s).Montreal Industries Inc.had the following activities during the year:
 
-What is Montreal's cost of goods manufactured during the year?
A)$268,000 
B)$248,000 
C)$240,000 
D)$238,000 
E)$260,000

Quizplus · Accepted Answer

The cost of goods manufactured can be calculated as:
Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory = Cost of Goods Manufactured
Beginning Work in Process Inventory is given as $30,000
Total Manufacturing Costs can be calculated as:
Direct Materials Used + Direct Labor + Manufacturing Overhead
Direct Materials Used = Beginning Raw Materials Inventory + Purchases - Ending Raw Materials Inventory
= $32,000 + $200,000 - $24,000
= $208,000
Direct Labor = $50,000
Manufacturing Overhead = $100,000
Total Manufacturing Costs = $208,000 + $50,000 + $100,000 = $358,000
Ending Work in Process Inventory is given as $70,000
Therefore, Cost of Goods Manufactured = $30,000 + $358,000 - $70,000 = $318,000
Hence, the correct answer is option C) $240,000.

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