Prime costs are $72,000 for the period and overhead is 40% of the period's total manufacturing costs. If beginning work in process was $12,500 and ending work in process is $10,000 the cost of goods manufactured is:

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Prime costs are $72,000, and overhead is 40% of total manufacturing costs. Let total manufacturing costs be X. Then, overhead = 0.4X and prime costs + overhead = X. So, $72,000 + 0.4X = X, solving gives X = $120,000. Cost of goods manufactured = Total manufacturing costs + Beginning WIP - Ending WIP = $120,000 + $12,500 - $10,000 = $122,500.

Prime Costs Are $72,000 for the Period and Overhead Is