Figure 2-13
Inventory balances for the Jameson Company in October 2016 are as follows:
During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively.
-Refer to Figure 2-13. What is the cost of goods manufactured?
A) $180,000
B) $186,000
C) $194,000
D) $196,800

Question

Figure 2-13
Inventory balances for the Jameson Company in October 2016 are as follows:
  During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively.
-Refer to Figure 2-13. What is the cost of goods manufactured?
A) $180,000 
B) $186,000 
C) $194,000 
D) $196,800

Quizplus · Accepted Answer

The formula for cost of goods manufactured is:
Beginning Work in Process + Total Manufacturing Costs - Ending Work in Process
Using the information provided in the table:
Beginning Work in Process = $20,000
Total Manufacturing Costs = $36,000 + $60,000 + $84,000 = $180,000
Ending Work in Process = $22,200
Cost of goods manufactured = $20,000 + $180,000 - $22,200 = $196,800. Therefore, the correct answer is D, $196,800.

Figure 2-13 Inventory Balances for the Jameson Company in October 2016 Are