During its first year of operations,Brown Company incurred the following product costs: Direct materials used in production $200,000
Direct labor $175,000
Manufacturing overhead $145,500
Brown Company's ending Work in Process Inventory amounted to $35,000 at the end of the year.What is the company's cost of finished goods manufactured for the year?

Question

Quizplus · Accepted Answer

To calculate the cost of finished goods manufactured, we need to add up the total product costs incurred during the year and subtract the ending Work in Process Inventory.

Total product costs = Direct materials + Direct labor + Manufacturing overhead 
Total product costs = $200,000 + $175,000 + $145,500 
Total product costs = $520,500

Cost of finished goods manufactured = Total product costs - Ending Work in Process Inventory 
Cost of finished goods manufactured = $520,500 - $35,000 
Cost of finished goods manufactured = $485,500

Therefore, the answer is C: $485,500.

During Its First Year of Operations,Brown Company Incurred the Following