McGown Corp. has the following information: Additional information for the year is as follows: Compute the cost of goods manufactured.

Question

McGown Corp. has the following information:  Additional information for the year is as follows:  Compute the cost of goods manufactured.

Quizplus · Accepted Answer

The cost of goods manufactured can be calculated using the formula: 
Beginning Raw Materials Inventory + Purchases of Raw Materials - Ending Raw Materials Inventory + Direct Labor + Manufacturing Overhead = Total Manufacturing Costs 
Using the information provided: 
Beginning Raw Materials Inventory = $36,000 
Purchases of Raw Materials = $230,000 
Ending Raw Materials Inventory = $44,000 
Direct Labor = $150,000 
Manufacturing Overhead = $80,000 
Total Manufacturing Costs = $452,000 
Then, adding Beginning Work in Process Inventory = $50,000 and subtracting Ending Work in Process Inventory = $160,000 yields a cost of goods manufactured of $242,000.