Question

Chavez Corporation reported the following data for the month of July:

Inventories:

	Beginning		Ending
Raw materials	$	33,000	$	33,000
Work in process	$	19,000	$	23,000
Finished goods	$	35,000	$	50,000

Additional information:

Raw materials purchases	$	69,000
Direct labor cost	$	94,000
Manufacturing overhead cost incurred	$	62,000
Indirect materials included in manufacturing overhead cost incurred	$	9,200
Manufacturing overhead cost applied to Work in Process	$	61,000

Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold.

The cost of goods manufactured for July is:

Multiple Choice

• $210,800

• $225,800

• $214,800

• $226,800

Answer 1

Correct answer----------$210,800

Working

Chavez Corporation
Schedule of Cost of Goods Manufactured
			Direct Material
Raw material Inventory Beginning	$ 33,000
Raw material Purchased	$ 59,800*
Raw material available for use	$ 92,800
Less: Raw material Inventory Ending	$ 33,000
Direct Material Used		$ 59,800
Direct labor		$ 94,000
Manufacturing overheads applied		$ 61,000
Total manufacturing Cost incurred during the period		$ 214,800
Add: Work in process Beginning		$ 19,000
Total Manufacturing cost to account for		$ 233,800
Less: Work in process Ending		$ 23,000
Cost of Goods Manufactured		$ 210,800

*Only direct material is reported