Morton Manufacturing shows cost of goods sold for the month of March was $90,000. The finished goods inventory was $15,000 on March 1 and $17,500 on March 31. Beginning and ending work-in-process inventories were $20,000 and $25,000, respectively. What was the cost of goods manufactured during March?

Question

Quizplus · Accepted Answer

The cost of goods manufactured is calculated as the cost of goods sold plus the ending finished goods inventory minus the beginning finished goods inventory plus the ending work-in-process inventory minus the beginning work-in-process inventory. So, $90,000 + $17,500 - $15,000 + $25,000 - $20,000 = $97,500. However, the correct calculation for cost of goods manufactured should actually consider the beginning and ending inventories of finished goods and the changes in work-in-process inventory. The correct formula is: Cost of Goods Manufactured = Cost of Goods Sold + Ending Finished Goods Inventory - Beginning Finished Goods Inventory + Beginning Work-in-Process Inventory - Ending Work-in-Process Inventory. Applying the correct values: $90,000 + $17,500 - $15,000 + $20,000 - $25,000 = $92,500. My initial explanation contained a calculation error, and the correct answer, based on the proper calculation, is indeed $92,500.

Morton Manufacturing Shows Cost of Goods Sold for the Month