The information below relates to Derby Manufacturing Company

The information below relates to Derby Manufacturing Company\'s operations for a recent month. (Assume that all raw materials are direct materials.): Purchases of raw materials........................ $91,000 Direct labor cost........................................ $122,000 Selling costs (total).................................... $42,000 Administrative costs (total)....................... $56,000 Manufacturing overhead costs (total)....... $340,000 Raw materials inventory, beginning.......... $22,000 Work in process inventory, beginning....... $27,000 Finished goods inventory, beginning........ $42,000 Raw materials inventory, ending............... $7,000 Work in process inventory, ending............ $35,000 Finished goods inventory, ending............. $15,000 What was Derby\'s cost of goods manufactured for the month? a. $545,000 b. $560,000 c. $568,000 d. $587,000

Solution

Cost of goods manufactured raw materials used raw materials inventory,beginning 22,000 add raw materials purchased 91,000 raw materials available 113,000 raw materials inventory,ending 7,000 raw materials used 106,000 direct labor cost 122,000 manufacturing overhead cost 340,000 total manufacturing cost 568,000 Add:work in process inventory,beginning 27,000 595,000 less:work in processe inventory,ending 35,000 cost of goods manufactured 560,000 answer option b) $560,000