If a company had a beginning balance of $5,000 in Work-in-Process Inventory,an ending balance of $7,000 and incurred direct labor costs of $8,000 and overhead costs of $4,000,then the cost of goods manufactured during the month was $24,000.

Question

Quizplus · Accepted Answer

The cost of goods manufactured formula is:
Beginning WIP Inventory + Direct Materials Used + Direct Labor + Manufacturing Overhead - Ending WIP Inventory = Cost of Goods Manufactured
Using the information given:
Beginning WIP Inventory = $5,000
Direct Labor = $8,000
Manufacturing Overhead = $4,000
Ending WIP Inventory = $7,000
To find Direct Materials Used, we need additional information. Therefore, the cost of goods manufactured cannot be determined as $24,000 with the given information.

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