Question

Question Help Goodrow Industries is calculating its Cost of Goods Manufactured at year-end. Goodrow's accounting records show the following: The Raw Materials Inventory account had a beginning balance of $16,000 and an ending balance of $19,000. During the year, the company purchased $58,000 of direct materials. Direct labor for the year totaled $133,000, while manufacturing overhead amounted to $154 000. The Work in Process Inventory account had a beginning balance of $30,000 and an ending balance of $21,000. Assume that Raw Materials inventory contains only direct materials. Compute the cost of Goods Manufactured for the year (Mint. The first step is to calculate the direct materials used during the year) Start by calculating the direct materials used during the year. Goodrow Industries Calculation of Direct Materials Used For Current Year Plus: Incon LOS Direct materials used 0/1)

Answer 1

Cost of goods manufactured	Beginning work in process inventory + Total manufacturing costs - Ending work in process inventory
Total manufacturing costs	Direct materials used+Direct labor cost+Manufacturing overhead
Calculation of direct materials used is shown below
Goodrow Industries
Calculation of direct materials used
For current year
Beginning raw material inventory	$16,000
Plus: Raw material purchased	$58,000
Total raw material available for use	$74,000
Less: Ending raw material inventory	$19,000
Direct materials used	$55,000
Calculation of cost of goods manufactured is shown below
Goodrow Industries
Calculation of cost of goods manufactured
For current year
Beginning work in process inventory (a)	$30,000
Add: Manufacturing costs
Direct materials used	$55,000
Direct labor costs	$133,000
Manufacturing overhead	$154,000
Total manufacturing costs (b)	$342,000
Less: Ending work in process inventory (c)	$21,000
Cost of goods manufactured (a+b-c)	$351,000