Arturo Manufacturing Company provided the following information for the year 201
ID: 2462733 • Letter: A
Question
Arturo Manufacturing Company provided the following information for the year 2012:Beginning balance-work in process inventory $12,000Ending balance-work in process inventory $28,000Beginning balance-direct materials inventory $42,000Ending balance-direct materials inventory $30,000Purchases-direct materials $180,000Direct labor $235,000Indirect materials $23,500Indirect labor $9,500Depreciation on factory plant & equipment $12,000Plant utilities & insurance $135,000What was the amount of the cost of goods manufactured for the year?
$607,000
$619,000
$591,000
$579,000
Explanation / Answer
Solution:
The amount of cost of goods manufactured for the year is $591,000
Working: Calculation of Cost of Goods Manufactured during the year
Beginning Inventory of Direct Material
$42,000
Add: Purchases-direct material during the year
$180,000
Less: Ending Inventory of Direct Material
($30,000)
Direct Material Consumed during the year
$192,000
Add: Direct Labor
$235,000
Prime Cost
$427,000
Add: Manufacturing Ovehreads
Indirect Material
$23,500
Indirect Labor
$9,500
Depreciation on factory plant & equipment
$12,000
Plant utilities & insurance
$135,000
Gross Factory Cost
$607,000
Add: Beginning balance-work in process inventory
$12,000
Less: Ending balance-work in process inventory
($28,000)
Cost of Goods Manufactured for the year
$591,000
Beginning Inventory of Direct Material
$42,000
Add: Purchases-direct material during the year
$180,000
Less: Ending Inventory of Direct Material
($30,000)
Direct Material Consumed during the year
$192,000
Add: Direct Labor
$235,000
Prime Cost
$427,000
Add: Manufacturing Ovehreads
Indirect Material
$23,500
Indirect Labor
$9,500
Depreciation on factory plant & equipment
$12,000
Plant utilities & insurance
$135,000
Gross Factory Cost
$607,000
Add: Beginning balance-work in process inventory
$12,000
Less: Ending balance-work in process inventory
($28,000)
Cost of Goods Manufactured for the year
$591,000
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