Question

Payton Corporation provided the following information for the year. Beginning Balance-Work-in-Process Inventory Ending Balance-Work-in-Process Inventory Beginning Balance-Direct Materials Ending Balance—Direct Materials Purchases-Direct Materials Direct Labor Indirect Labor Depreciation on Factory Plant and Equipment Plant Utilities and Insurance $28,000 55,000 84,000 60,000 356,000 470,000 20,000 24,000 269,000 What was the amount of the cost of goods manufactured for the year? O A. $1,366,000 OB. $1,136,000 OC. $1,190,000 OD $1,163,000

Answer 1

Option B is the Correct Answer. ( $ 1,136,000 ).

Direct Materials Used = Beginning Balance Direct Materials + Purchases Direct Materials + Ending Balance Direct Materials

Direct Materials Used = 84,000 + 356,000 - 60,000 = $ 380,000

Manufacturing Overhead Applied = Indirect Labour + Depreciation on Factory Plant and Equipment + Plant Utilities and Insurance

Manufacturing Overhead Applied = 20,000 + 24,000 + 269,000 = $ 313,000

Total Manufacturing Costs = Direct Materials Used + Manufacturing Overhead Applied + Direct Labour

Total Manufacturing Costs = 380,000 + 313,000 + 470,000 = $ 11,63,000

Cost of Goods Manufactured = Beginning Balance Work in Process + Total Manufacturing Costs - Ending Balance Work in Process

Cost of Goods Manufactured = 28,000 + 11,63,000 - 55,000

Cost of Goods Manufactured = $ 11,36,000