South State Inc.used $71,000 of direct materials and incurred $37,000 of direct labor costs during 2015.Indirect labor amounted to $2,700 while indirect materials used totaled $1,600.Other operating costs pertaining to the factory included utilities of $3,100; maintenance of $4,500; repairs of $1,800; depreciation of $7,900; and,property taxes of $2,600.There was no beginning or ending finished goods inventory,but Work-in-Process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance. How much is the cost of goods manufactured?

Question

Quizplus · Accepted Answer

To find the cost of goods manufactured, we need to calculate the total manufacturing costs incurred during the year and add the increase in work-in-process inventory, then subtract the beginning work-in-process inventory.

Total manufacturing costs = direct materials + direct labor + indirect labor + indirect materials + factory operating costs

Total manufacturing costs = $71,000 + $37,000 + $2,700 + $1,600 + $3,100 + $4,500 + $1,800 + $7,900 + $2,600

Total manufacturing costs = $132,200

Cost of goods manufactured = total manufacturing costs + ending work-in-process inventory - beginning work-in-process inventory

Cost of goods manufactured = $132,200 + $7,500 - $5,500

Cost of goods manufactured = $130,200

Therefore, the best choice is B, which is $130,200.