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6 November, 14:43

Current information for the Healey Company follows:Beginning raw materials inventory $15,200 Raw material purchases 60,000Ending raw materials inventory 16,600Beginning work in process inventory 22,400Ending work in process inventory 28,000Direct labor 42,800Total factory overhead 30,000All raw materials used were traceable to specific units of product. Healey Company's Cost of Goods Manufactured for the year is:a. $125,800. b. $128,600. c. $131,400. d. $137,000. e. $139,000.

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  1. 6 November, 17:40
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    The correct answer is A.

    Explanation:

    Giving the following information:

    Beginning raw materials inventory $15,200

    Raw material purchases 60,000

    Ending raw materials inventory 16,600

    Total direct material used during the period = (15,200 + 60,000 - 16,600) = $58,600

    Beginning work in process inventory 22,400

    Ending work in process inventory 28,000

    Direct labor 42,800

    Total factory overhead 30,000

    To calculate the cost of goods manufactured we need to use the following formula:

    cost of goods manufactured = beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

    cost of goods manufactured = 22,400 + 58,600 + 42,800 + 30,000 - 28,000 = $125,800
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