Assuming the cost of direct materials used is $1,500,000, compute the total manu

Question

Assuming the cost of direct materials used is $1,500,000, compute the total manufacturing costs using the information below. Raw materials inventory, January 1 $ 30,000 Raw materials inventory, December 31 60,000 Work in process, January 1 27,000 Work in process, December 31 18,000 Finished goods, January 1 60,000 Finished goods, December 31 48,000 Raw materials purchases 1,500,000 Direct labor 690,000 Factory utilities 225,000 Indirect labor 75,000 Factory depreciation 500,000 Operating expenses 630,000

Explanation / Answer

Cost of Manufacturing:

Amount($) Direct Material 1,500,000 Direct Labor 690,000 Factory Utilities 225,000 Indirect Labor 75,000 Factory Depreciation 500,000 Operating Expenses 630,000 Total Cost 3,620,000 Add: Opening WIP 27,000 Less: Closing WIP 18,000 Cost of Goods Manufactured 3,629,000

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