Truman Company started the accounting period with the following beginning balanc

Question

Truman Company started the accounting period with the following beginning balances:

Raw materials, $32,000; Work in process, $80,000; Finished goods, $10,000
During the accounting period, the company purchased $50,000 of raw materials and ended the period with $6,000 in raw material inventory. Direct labor costs for the period were $110,000 and $26,000 of manufacturing overhead costs was allocated to work in process. There was no over or underapplied overhead. Ending work in process was $72,000 and ending finished goods inventory was $25,000. Goods were sold during the period for $340,000. The amount of cost of goods manufactured (i.e., amount transferred from work in process to finished goods) would be:

$205,000. $212,000. $220,000. $292,000.

Explanation / Answer

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Please find the answer as follows:

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Opening Raw Material 32000 Purchases 50000 Less Ending Inventory -6000 Direct Material Used 76000 Direct Labor 110000 Manufacturing Costs 26000 Add Opening WIP 80000 Less Closing WIP -72000 Cost of Goods Manufactured 220000

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