Inventory balances for the Jameson Company in October 2018 are as follows: $$\begin{array} { l c c }
& \text { October } 1,2018 & \text { October } 31,2018 \
\text { Raw materials } & \$ 27,000 & \$ 21,000 \
\text { Work in process } & 48,000 & 37,200 \
\text { Finished goods } & 108,000 & 90,000
\end{array}$$ During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively.
What is the cost of goods manufactured?
A)$180,000
B)$186,000
C)$194,000
D)$196,800

Question

Inventory balances for the Jameson Company in October 2018 are as follows: $$\begin{array} { l c c } 
& \text { October } 1,2018 & \text { October } 31,2018 \
\text { Raw materials } & \$ 27,000 & \$ 21,000 \
\text { Work in process } & 48,000 & 37,200 \
\text { Finished goods } & 108,000 & 90,000
\end{array}$$ During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively.
What is the cost of goods manufactured?
A)$180,000
B)$186,000
C)$194,000
D)$196,800

Quizplus · Accepted Answer

The cost of goods manufactured is calculated by adding the total manufacturing costs to the beginning work in process inventory and then subtracting the ending work in process inventory. Total manufacturing costs include direct materials, direct labor, and factory overhead. Thus, the calculation is as follows: Beginning work in process ($48,000) + Direct materials ($36,000) + Direct labor ($60,000) + Factory overhead ($84,000) - Ending work in process ($37,200) = $190,800.

Inventory Balances for the Jameson Company in October 2018 Are