Question

Consider Derek's budget information: materials to be used, $64,500; direct labor, $198,700; factory overhead, $392,900; work...

Consider Derek's budget information: materials to be used, $64,500; direct labor, $198,700; factory overhead, $392,900; work in process inventory on January 1, $186,300; and work in progress inventory on December 31, $191,800. What is the budgeted cost of goods manufactured for the year?

a.$191,800

b.$656,100

c.$842,400

d.$650,600

Business   Accounting   
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Answer #1

Solution:

Budgeted Cost of Goods Manufactured = Total Manufacturing Cost + Beginning Work-in-process Inventory - Ending Work-in-process Inventory

Calculation of total manufacturing costs:

Direct Materials $64,500

Direct Labour $198,700

Factory Overhead $392,900

Total Manufacturing Costs $656,100

Now,

Budgeted Cost of Goods Manufactured:

Total Manufactured Costs $656,100
Add: Beginning Work-in-process Inventory $186,300
Less: Ending Work-in-process Inventory ($191,800)
Budgeted Cost of Goods Manufactured $650,600

Therefore, the total budgeted cost of goods manufactured for the year is $650,600

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