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5 May, 19:40

Desrevisseau Inc., a manufacturing company, has provided the following data for the month of August. The balance in the Work in Process inventory account was $10,000 at the beginning of the month and $22,000 at the end of the month. During the month, the company incurred direct materials cost of $60,000 and direct labor cost of $39,000. The actual manufacturing overhead cost incurred was $40,000. The manufacturing overhead cost applied to Work in Process was $43,000. The cost of goods manufactured for August was: A. $145,000B. $130,000C. $133,000D. $142,000

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  1. 5 May, 22:01
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    B. $130,000

    Explanation:

    We know,

    Cost of goods manufactured = Direct materials + Direct labor + Manufacturing overhead + Beginning work-in-process - Ending work-in-process

    Given,

    Direct materials = $60,000

    Direct labor = $39,000

    Manufacturing overhead = $43,000 (As the manufacturing overhead cost applied to work-in-process, so we will take $43,000 instead of $40,000).

    Beginning work-in-process = $10,000

    Ending work-in-process = $22,000

    Putting the information into the above formula, we can get,

    Cost of goods manufactured = $60,000 + $39,000 + $43,000 + $10,000 - $22,000

    Cost of goods manufactured = $130,000
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