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Peyton Manufacturing has the following data:
Work-in-process inventory, January 1, 20x8 $ 57,000
Work-in-process inventory, December 31, 20x8 62,500
Conversion costs during the year 429,000
If direct materials used during the year were $149,000, what was cost of goods manufactured?
a. $572,500.
b. $154,500.
c. $567,000.
d. $423,500.
e. None of the answers is correct.

Sagot :

Ayokenny2001idn

Answer:

a. $572,500

Explanation:

With regards to the above information, cost of goods manufactured is computed as;

= Conversion cost + Direct materials used - (Change in WIP balances)

= $429,000 + $149,000 - ($62,500 - $57,000)

= $429,000 + $149,000 - $5,500

= $572,500

Parrainidn

Based on the direct materials, conversion and other costs, the cost of goods manufactured was $572,500.

Cost of goods manufactured is calculated as:

= Beginning work in process + Total manufacturing cost - Ending Work in process

Total manufacturing cost:

= Conversion cost + Direct material

= 429,000 + 149,000

= $578,000

Cost of goods manufactured is therefore:

= 57,000 + 578,000 - 62,500

= $572,500

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