Walker Company reported the following year-end information: $\begin{array}{lr}
\text { Beginning work in process inventory } & \$ 46,000 \
\text { Beginning raw materials inventory } & 24,000 \
\text { Ending work in process inventory } & 50,000 \
\text { Ending raw materials inventory } & 20,000\\text { Raw materials purchased } & 830,000 \
\text { Direct labor } & 440,000 \
\text { Manufacturing overhead } & 100,000
\end{array}$ How much is Walker's cost of goods manufactured for the year?

Question

Quizplus · Accepted Answer

The cost of goods manufactured is calculated as: Beginning WIP Inventory + Total Manufacturing Costs - Ending WIP Inventory. Total Manufacturing Costs = Direct Materials Used + Direct Labor + Manufacturing Overhead. Direct Materials Used = Beginning Raw Materials Inventory + Raw Materials Purchased - Ending Raw Materials Inventory. Thus, Direct Materials Used = $24,000 + $830,000 - $20,000 = $834,000. Total Manufacturing Costs = $834,000 + $440,000 + $100,000 = $1,374,000. Cost of Goods Manufactured = $46,000 + $1,374,000 - $50,000 = $1,370,000.

Walker Company Reported the Following Year-End Information How Much Is Walker's Cost of Goods Manufactured for the work