Using the absorption method, cost of goods manufactured for the year is:
A) $450,000
B) $550,000
C) $660,000
D) $900,000

Question

Quizplus · Accepted Answer

The absorption method allocates all of the manufacturing overhead costs to the units produced, including both fixed and variable costs. 
Using the absorption method, the Cost of Goods Manufactured (COGM) can be calculated as follows: 
Direct materials + Direct labor + Manufacturing overhead applied 
= $200,000 + $150,000 + $310,000 
= $660,000. 
Therefore, the correct answer is C.

Using the Absorption Method, Cost of Goods Manufactured for the Year