The Johnson Corporation was started on January 1, 2014. The company incurred the

Question

The Johnson Corporation was started on January 1, 2014. The company incurred the following transactions during the year (Assume all transactions involve cash):

1) Acquired $2,100 of capital from the owners.
2) Purchased $410 of direct raw materials.
3) Used $310 of these direct raw materials in the production process.
4) Paid production workers $510 cash.
5) Paid $310 for manufacturing overhead (applied and actual overhead are the same).
6) Started and completed 250 units of inventory.
7) Sold 160 units at a price of $6 each.
8) Paid $150 for selling and administrative expenses.

The amount of cost of goods manufactured would be:

Explanation / Answer

Cost of goods manufactured = Direct materials + Manufacturing overhead

= 310+310 i.e 620

Cost of goods manufactured = 620

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