If a company had a beginning balance of $5,000 in Work-in-Process Inventory,an ending balance of $7,000 in Work-in-Process Inventory and incurred direct labor costs of $8,000 and overhead costs of $4,000,then the cost of goods manufactured during the month was $24,000.Raw Materials used were $10,000.

Question

Quizplus · Accepted Answer

The information given does not provide enough data to determine the cost of goods manufactured. The formula for cost of goods manufactured is:

Beginning WIP Inventory + Total Manufacturing Costs - Ending WIP Inventory = Cost of Goods Manufactured

Using the numbers given:
$5,000 + $8,000 + $4,000 - $7,000 = $10,000

This calculation gives the total manufacturing costs for the month. The raw materials used are given as $10,000, but that does not necessarily mean that it is the only component of total manufacturing costs. Therefore, we cannot determine the cost of goods manufactured with the given information.

If a Company Had a Beginning Balance of $5,000 in Work-In-Process