Figure 2-1. Concam Inc.manufactures television sets.Last month direct materials (electronic components,etc.)costing $500,000 were put into production.Direct labor of $800,000 was incurred,overhead equaled $450,000,and selling and administrative costs totaled $360,000.The company manufactured 8,000 television sets during the month.Assume that there were no beginning or ending work in process balances.
Refer to Figure 2-1.What was the amount of cost of goods manufactured last month?

Question

Quizplus · Accepted Answer

The cost of goods manufactured is calculated by summing direct materials, direct labor, and manufacturing overhead. Thus, $500,000 (direct materials) + $800,000 (direct labor) + $450,000 (overhead) = $1,750,000. Selling and administrative costs are not included in the cost of goods manufactured.