Figure 2-5. In July,Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000.Overhead totaled $32,000 for the month.Information on inventories was as follows:
Refer to Figure 2-5.What was the cost of goods manufactured for July?

Question

Figure 2-5. In July,Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000.Overhead totaled $32,000 for the month.Information on inventories was as follows:
 Refer to Figure 2-5.What was the cost of goods manufactured for July?

Quizplus · Accepted Answer

Cost of goods manufactured = Beginning inventory + Total manufacturing cost - Ending inventory
Beginning inventory = $16,000
Total manufacturing cost = Materials cost + Direct labor cost + Overhead
Total manufacturing cost = $21,000 + $18,000 + $32,000 = $71,000
Ending inventory = $16,400
Therefore,
Cost of goods manufactured = $16,000 + $71,000 - $16,400 = $69,600