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 $19,000, ending inventory of materials $1,500.

Its beginning inventory of work-in-process (WIP) was $3,000, ending inventory of WIP was $6,700.

Its cost of direct labor was $19,000, manufacturing overhead $15,000.

Its beginning inventory of finished goods was $4,000, ending inventory of finished goods was $3,300.

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)?

Explanation / Answer

a) Cost of MAterials used = Beginning Raw Materials +purchases -Ending Raw materials

= 4000+19000 - 1500 = $21500

b) Cost of Goods MAnufactured = direct material used + direct labour used +manufacturing overhead +beginnig WIPinventory - ending WIP inventory

Cost of Goods manufactured = 21500+19000+15000+3000 - 6700 = $51800

c) Cost of goods sold = Cost of beginning inventory of finished goods +cost of goods manfactured - cost of ending inventory of finished goods

= 4000+51800-3300 = $52500

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