Question

Root Shoe Company makes loafers. During the most recent year, Root incurred total manufacturing costs of $26,300,000. Of this amount, $2,000,000 was direct materials used and $19,800,000 was direct labor. Beginning balances for the year were Direct Materials, $700,000; Work-in-Process Inventory, $1,500,000; and Finished Goods Inventory, $400,000. At the end of the year, balances were Direct Materials, $800,000; Work-in-Process Inventory, $1,200,000; and Finished Goods Inventory, $600,000. Read the requirements. Ending Direct Materials 800,000 $ 2,100,000 Purchases Requirement 2. Analyze the inventory accounts to determine the cost of goods manufactured for the year. Work-in-Process Beginning Work-in-Process Inventory Direct Materials Used Direct Labor Manufacturing Overhead 26,300,000 Total Manufacturing Costs Incurred during the Year Total Manufacturing Costs to Account For Ending Work-in-Process Inventory Cost of Goods Manufactured

Answer 1

Solution

Beginning Work in process Inventory		$          1,500,000
Direct material used	$          2,000,000
Direct labor	$        19,800,000
Manufacturing overhead	$          4,500,000
Total manufacturing cost incurred during the year		$        26,300,000
Total manufacturing cost to account for		$        27,800,000
Wnding work in process inventory		$          1,200,000
Cost of goods manufactured		$        26,600,000

Ending WIP is deducted from total cost to account for.