Powerful, Inc. has provided the following data pertaining to its last year of operations: Raw...
Question:
Powerful, Inc. has provided the following data pertaining to its last year of operations:
Raw materials inventory on January 1 was $100,000.
Raw materials inventory on December 31 was $70,100.
Work in process inventory on January 1was $90,000.
Work in process inventory on December 31 was $76,600.
Finished goods inventory on January 1 was $210,000.
Finished goods inventory on December 31 was $182,000.
Raw material purchases during the year totaled $620,000.
Direct labor cost incurred totaled $89,000.
Manufacturing overhead costs actually incurred totaled $476,000.
Manufacturing overhead costs applied to jobs (and transferred from Manufacturing Overhead to Work in Process) totaled $496,000.
Sales totaled $2,202,000.
Selling and administrative expenses incurred totaled $25,000.
How much was cost of goods manufactured?
A. $1,248,300
B. $1,718,300
C. $1,324,600
D. $1,299,900
E. $1,228,300
The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor cost ($) of:
A. 80%
B. 125%
C. 300%
D. 240%
E. 200%
Could you please be kind enough and show me the solutions and answers in detail?
Cost of Goods:
The total cost of goods manufactured during a given period is determined by taking a sum of all the resources such as direct materials, direct labor and manufacturing overhead. Out of the total goods manufactured, some are sold to the end customers while the remaining are retained as finished goods.
Answer and Explanation: 1
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The calculated value of the cost of goods manufactured is $1,228,300 (i.e. option E).
The change in work in process inventory during the...
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Cost of Goods: Definition & Calculation
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Chapter 3 / Lesson 13
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The cost of goods is the expenses used to produce products, provide services, or acquire inventory. Study the definition of cost of goods and how to calculate it in this lesson.
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