Rediger Inc., a manufacturing Corporation, has provided the following data for the month of June.The balance in the Work in Process inventory account was $22,000 at the beginning of the month and $17,000 at the end of the month.During the month, the Corporation incurred direct materials cost of $55,000 and direct labor cost of $28,000.The actual manufacturing overhead cost incurred was $53,000.The manufacturing overhead cost applied to Work in Process was $51,000.The cost of goods manufactured for June was:

A) $141,000
B) $139,000
C) $134,000
D) $136,000

Question

Cameron Fallon · Accepted Answer

Final Answer : B, Explanation :  To calculate the cost of goods manufactured, we need to use the following formula:Direct Materials + Direct Labor + Manufacturing Overhead applied = Total Manufacturing CostsTotal Manufacturing Costs + Beginning WIP Inventory - Ending WIP Inventory = Cost of Goods ManufacturedUsing the data given, we can calculate:Direct Materials = $55,000Direct Labor = $28,000Manufacturing Overhead Applied = $51,000Total Manufacturing Costs = Direct Materials + Direct Labor + Manufacturing Overhead Applied= $55,000 + $28,000 + $51,000= $134,000Beginning WIP Inventory = $22,000Ending WIP Inventory = $17,000Cost of Goods Manufactured = Total Manufacturing Costs + Beginning WIP Inventory - Ending WIP Inventory= $134,000 + $22,000 - $17,000= $139,000Therefore, the best choice is B, $139,000. Cost of goods manufactured = Direct materials + Direct labor + Manufacturing overhead applied + Beginning work in process inventory - Ending work in process inventory= $55,000 + $28,000 + $51,000 + $22,000 - $17,000= $139,000

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