Generic Motors is a manufacturing firm. Its beginning inventory of materials was

Question

Generic Motors is a manufacturing firm. Its beginning inventory of materials was $4,000, purchases of materials $16,000, ending inventory of materials $3,500.
Its beginning inventory of work-in-process (WIP) was $6,000, ending inventory of WIP was $3,700.
Its cost of direct labor was $11,000, manufacturing overhead $17,000.
Its beginning inventory of finished goods was $3,000, ending inventory of finished goods was $5,300.

Required:
a) What was the cost of materials used?


b) What was the cost of goods manufactured (COGM)?


c) What was the cost of goods sold (COGS)?
3

Explanation / Answer

Cost of material used Purchased during the period          16,000 Add: opening            4,000 Less: closing            3,500 Cost of material used          16,500 Cost of goods manufactured Direct raw materials used           16,500 Direct labor           11,000 Manufacturing overhead           17,000 Opening WIP             6,000 Less: closing WIP            (3,700) Cost of goods manufactured           46,800 Cost of goods sold Opening Inventory             3,000 Cost of goods manufactured           46,800 Less: closing inventory            (5,300) Cost of goods sold           44,500

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