If a company had a beginning balance of $5,000 in Work-in-Process Inventory, an ending balance of $7,000 in Work-in-Process Inventory and incurred direct labor costs of $8,000 and overhead costs of $4,000, then the cost of goods manufactured during the month was $20,000. Raw Materials used were $10,000.

Question

Quizplus · Accepted Answer

The cost of goods manufactured is calculated as: Beginning WIP Inventory ($5,000) + Direct Labor ($8,000) + Overhead ($4,000) + Raw Materials Used ($10,000) - Ending WIP Inventory ($7,000) = $20,000.

If a Company Had a Beginning Balance of $5,000 in Work-In-Process