Conrad, Inc. recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records.$\begin{array}{lr}
\text { Cost of Goods Sold } & \$ 65,000 \
\text { Work-in-Process Inventory, Beginning } & 10,500 \
\text { Work-in-Process Inventory, Ending } & 9,000 \
\text { Selling and Administrative Expense } & 15,000 \
\text { Finished Goods Inventory, Ending } & 15,000 \
\text { Finished Goods Inventory, Beginning } & ?\
\text { Direct Materials Used } & ? \
\text { Factory Overhead Applied } & 12,000 \
\text { Operating Income } & 14,000 \
\text { Direct Materials Inventory, Beginning } & 11,000 \
\text { Direct Materials Inventory, Ending } & 6,000 \
\text { Cost of Goods Manufactured } & 60,000
\end{array}$Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. The CFO of Conrad, Inc. has asked you to recalculate the following accounts and to report to him by the end of the day.
What is the amount of total manufacturing cost?
A)$50,500.
B)$52,000.
C)$56,400.
D)$58,500.

Question

Quizplus · Accepted Answer

Total manufacturing cost is calculated as the sum of direct materials used, direct labor, and factory overhead. First, calculate direct labor as 1.5 times the factory overhead, which is 1.5 * $12,000 = $18,000. Direct materials used can be found by adding the beginning direct materials inventory to purchases (which we need to find) and then subtracting the ending inventory. Since we're not given purchases directly but know the cost of goods manufactured, we can work backwards. The direct materials used is part of the total manufacturing costs, which also include direct labor and factory overhead. Given that the cost of goods manufactured is $60,000, and we already know factory overhead ($12,000) and direct labor ($18,000), we can solve for direct materials used as part of the total manufacturing cost equation. The total manufacturing cost is $60,000, which includes direct materials, direct labor ($18,000), and factory overhead ($12,000). Subtracting direct labor and factory overhead from the cost of goods manufactured gives us the direct materials used, which is $60,000 - $18,000 - $12,000 = $30,000 for direct materials used. Therefore, the total manufacturing cost is the sum of these three: $30,000 (direct materials) + $18,000 (direct labor) + $12,000 (factory overhead) = $60,000. However, the correct calculation method involves directly adding the given and calculated figures: direct materials used ($30,000) + direct labor ($18,000) + factory overhead ($12,000) = $60,000. The mistake in the explanation was in the interpretation of the calculation process, but the correct total manufacturing cost considering the components is indeed $60,000, which is not an option provided, indicating a misunderstanding in the explanation process. The correct approach to find the total manufacturing cost directly adds the components (direct materials, direct labor, and factory overhead) based on the information given and calculated, leading to the realization that the provided options do not match the correct calculation.

Conrad, Inc Direct Labor Cost Incurred During the Period Amounted to 1