Question

The following accounts are from last year’s books at Sharp Manufacturing:

Raw Materials
Bal	0	(b)	157,000
(a)	171,500
	14,500

Work In Process
Bal	0	(f)	522,000
(b)	133,500
(c)	171,000
(e)	217,500
	0

Finished Goods
Bal	0	(g)	475,000
(f)	522,000
	47,000

Manufacturing Overhead
(b)	23,500	(e)	217,500
(c)	27,500
(d)	159,000
			7,500

Cost of Goods Sold
(g)	475,000

Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of cost of goods manufactured for the year?

Answer 1

When goods are manufactured, Work in process account is credited and finished goods is debited. From the given data, it is clear that in transaction (f) $522,000 is credited to work in process and $522,000 is debited to Finished Goods account. Hence, the cost of goods manufactured is $522,000.