South State Company used $76,500 of direct materials and incurred $37,200 of direct labour costs during 2017.Indirect labour amounted to $2720 while indirect materials used totalled $5290.Other operating costs pertaining to the factory included electricity & gas of $4020,maintenance of $3599; repairs of $5335; depreciation of $8040; and,property taxes of $3512.There was no beginning or ending finished goods inventory,but work in process inventory began the year with a $5300 balance and ended the year with a $7700 balance.
How much is the cost of goods manufactured?
A) $138,516
B) $151,516
C) $143,816
D) $146,216

Question

Quizplus · Accepted Answer

The formula for calculating cost of goods manufactured is:

Direct Materials + Direct Labor + Manufacturing Overhead + Beginning Work in Process Inventory – Ending Work in Process Inventory

Using the figures provided, we can calculate the manufacturing overhead as follows:

Indirect Labor + Indirect Materials + Other Operating Costs = $2,720 + $5,290 + $40,906 = $48,916

Now, using the formula above, we can calculate the cost of goods manufactured as:

$76,500 + $37,200 + $48,916 + $5,300 - $7,700 = $143,816

Therefore, the answer is C) $143,816.

South State Company Used $76,500 of Direct Materials and Incurred