Walker Manufacturing Company reported the following year-end information: How much is Walker Manufacturing's cost of goods manufactured for the year?

Question

Walker Manufacturing Company reported the following year-end information:  How much is Walker Manufacturing's cost of goods manufactured for the year?

Quizplus · Accepted Answer

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. Using the information provided, we can calculate the cost of goods manufactured as follows:

Beginning work in process inventory: $125,000
Direct materials used: $450,000
Direct labor: $325,000
Manufacturing overhead: $350,000
Total manufacturing costs: $1,125,000
Ending work in process inventory: $55,000

Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory
Cost of goods manufactured = $1,125,000 + $125,000 - $55,000
Cost of goods manufactured = $1,070,000

Therefore, the correct answer is C.

Walker Manufacturing Company Reported the Following Year-End Information: How