Desrevisseau Inc., a manufacturing company, has provided the following data for

Question

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 $11,500 at the beginning of the month and $25,600 at the end of the month. During the month, the company incurred direct materials cost of $72,600 and direct labor cost of $45,000. The actual manufacturing overhead cost incurred was $46,000. The manufacturing overhead cost applied to jobs was $49,000. The cost of goods manufactured for August was:

Explanation / Answer

Firstly we have to calculate here prime cost. Prime cost is the sum of Direct Material Cost, Direct Labour cost and Direct Expenses.

Direct Material Cost 72600

Direct Labor cost 45000

Prime Cost 117600

Manufacturing Cost 46000

Work Cost Incurred 163600

AddOpening Wip 11500

Less Closing Wip 25600

Cost of goods manufac 149500

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