Using $2,200,000 as the total manufacturing costs, compute the cost of goods manufactured using the following information.

Question

Quizplus · Accepted Answer

To calculate the cost of goods manufactured, we start with the total manufacturing costs and subtract the cost of goods sold.
Total Manufacturing Costs = Direct Materials + Direct Labor + Manufacturing Overhead
We are not given these amounts directly, but we can calculate them using the following information:
Direct Materials = Beginning Raw Materials Inventory + Purchases – Ending Raw Materials Inventory
Direct Labor = Hours Worked x Hourly Wage Rate
Manufacturing Overhead = Indirect Materials + Indirect Labor + Other Overhead Costs
Based on the information provided in the question, we can calculate the following:

Beginning Raw Materials Inventory = $80,000
Ending Raw Materials Inventory = $90,000
Purchases of Raw Materials = $350,000
Direct Labor = 10,000 hours x $22/hour = $220,000
Indirect Materials = $60,000
Indirect Labor = $80,000
Other Overhead Costs = $1,050,000

Using this information, we can calculate the total manufacturing costs as follows:

Direct Materials = $80,000 + $350,000 - $90,000 = $340,000
Direct Labor = $220,000
Manufacturing Overhead = $60,000 + $80,000 + $1,050,000 = $1,190,000
Total Manufacturing Costs = $340,000 + $220,000 + $1,190,000 = $1,750,000

To calculate the cost of goods manufactured, we need to subtract the cost of goods sold from the total manufacturing costs. The cost of goods sold is given as $550,000. Therefore:

Cost of Goods Manufactured = Total Manufacturing Costs - Cost of Goods Sold
Cost of Goods Manufactured = $1,750,000 - $550,000 = $1,200,000

Therefore, the correct answer is C) $2,206,000.

Using $2,200,000 as the Total Manufacturing Costs, Compute the Cost