Question

T-ACCOUNTS below are from last year’s books at Shapiro Manufacturing Company:

Raw Materials
Bal	0	(b)	155,000
(a)	166,500
	11,500

Work In Process
Bal	0	(f)	514,000
(b)	132,500
(c)	169,000
(e)	212,500
	0

Finished Goods
Bal	0	(g)	465,000
(f)	514,000
	49,000

Manufacturing Overhead
(b)	22,500	(e)	212,500
(c)	26,500
(d)	157,000
			6,500

Cost of Goods Sold
(g)	465,000

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?

Multiple Choice

• $253,750

• $458,500

• $514,000

• $465,000

Answer 1

Solution

The correct answer is c) $514,000

Calculating cost of goods manufactured:-

Beginning work in process	$0
Direct material	$132,500
Direct labor	$169,000
Manufacturing overhead	$212,500
Less: Ending work in process	$0
Cost of goods manufactured	$514,000

OR

Cost of goods manufactured= Cost of goods sold beginning balance +Finishing goods ending balance

=$465,000+$49,000

=$514,000

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