Question Completion:
Chavez Corporation reported the following data for the month of July: What is the cost of goods manufactured for July?
Inventories: Beginning Ending
Raw materials $29,000 $31,000
Work in process 17,000 19,000
Finished goods 33,000 48,000
Additional information:
Raw materials purchases $67,000
Direct labor cost $92,000
Manufacturing overhead cost incurred $60,000
Indirect materials included in manufacturing
overhead cost incurred $8,400
Manufacturing overhead cost
applied to Work in Process $59,000
Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold.
The cost of goods manufactured for July is:
A) $205,600
B) $218,600
C) $207,600
D) $219,600
Answer:
Chavez Corporation
Cost of Goods Manufactured for July is:
A) $205,600
Explanation:
T-accounts as workings:
Raw materials
Account Titles Debit Credit
Beginning balance $29,000
Purchases 67,000
Work in Process $56,600
Manufacturing overhead 8,400
Ending balance $31,000
Totals $96,000 $96,000
Work in Process
Account Titles Debit Credit
Beginning balance $17,000
Raw materials 56,600
Direct labor cost 92,000
Overhead applied 59,000
Finished Goods $205,600
Ending balance $19,000
Totals $224,600 $224,600
Finished Goods
Account Titles Debit Credit
Beginning balance $33,000
Work in Process 205,600
Cost of Goods Sold $190,600
Ending balance $48,000
Totals $238,600 $238,600
Manufacturing Overhead
Account Titles Debit Credit
Cash $51,600
Raw materials 8,400
WIP: overhead applied $59,000
Cost of Goods Sold 1,000
Totals $60,000 $60,000
Cost of Goods Sold
Account Titles Debit Credit
Finished Goods $190,600
Manufacturing overhead 1,000
Income Statement $191,600
Total $191,600 $191,600
