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Chapter 16: Q16-9SE (page 888)

Computing cost of goods manufactured

Use the following inventory data for Caddy Golf Company to compute the cost of goods manufactured for the year:

Direct Materials Used $ 12,000

Manufacturing Overhead 21,000

Work-in-Process Inventory:

Beginning Balance 1,000

Ending Balance 5,000

Direct Labor 9,000

Finished Goods Inventory:

Beginning Balance 18,000

Ending Balance 4,000

Short Answer

Expert verified

The cost of goods manufactured is computed as $38,000

Step by step solution

01

Definition of direct material used

Direct materials are defined as raw materials which are used in or associated with the production process directly.

02

Computation of cost of goods manufactured

Caddy Golf Company

Cost of goods manufactured

Amount ($)

Amount ($)

Work in Process, Beginning

$1,000

Direct Material Used

$12,000

Direct Labor

$9,000

Manufacturing Overhead

$21,000

Total manufacturing cost incurred during the year

$42,000

Total manufacturing costs to account for

$43,000

Work in process, Ending

-$5,000

Cost of goods manufactured

$38,000

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