Question 11. 11. Wayne Company\'s beginning and ending inventories for the month

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Question 11. 11. Wayne   Company's beginning and ending inventories for the month of June were as   follows:                     June   1             June 30
  Work in progress                  $145,000          171,000    
   Finished Goods                       85,000             78,000
  
  Production data for the month follow:

Direct labor cost incurred                                          $200,000

Direct labor hours                                                         25,000

Actual manufacturing overhead cost   incurred            132,000

Direct Materials                                                             170,000
  
   Wayne applies manufacturing overhead cost to jobs based on direct   labor-hours, and the predetermined rate is $5.75 per direct labor-hour. The   company does not close under applied or over applied manufacturing overhead   to Cost of Goods Sold until the end of the year. What is the amount of cost   of goods manufactured? (Points : 2)

       $508,750
       $502,000
       $585,000
       $487,750
I'm not quote sure how to figure this, my texbook is kind of confusing on this. Any help is appreciated. Thanks!

Question 11. 11. Wayne   Company's beginning and ending inventories for the month of June were as   follows:                     June   1             June 30
  Work in progress                  $145,000          171,000    
   Finished Goods                       85,000             78,000
  
  Production data for the month follow:

Direct labor cost incurred                                          $200,000

Direct labor hours                                                         25,000

Actual manufacturing overhead cost   incurred            132,000

Direct Materials                                                             170,000
  
   Wayne applies manufacturing overhead cost to jobs based on direct   labor-hours, and the predetermined rate is $5.75 per direct labor-hour. The   company does not close under applied or over applied manufacturing overhead   to Cost of Goods Sold until the end of the year. What is the amount of cost   of goods manufactured? (Points : 2)

Explanation / Answer

Hi,

Please find the answer as follows:

Cost of Goods Manufactured = Direct Material + Direct Labor + Manufacturing Overhead +Opening WIP - Closing WIP

Manufacturing Overhead Applied = Direct Labor Hours*Predetermined Overhead Rate = 25000*5.75 = 143750

Cost of Goods Manufactured = 170000 + 200000 + 143750 + 145000 - 171000 = 487750

Option D (487750) is the correct answer.

Thanks.

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