Use the information below to answer questions Direct labour...................₦50 000 Beginning work-in-progress......₦4 000 Raw materials used................
Question 1 Report
Use the information below to answer questions Direct labour...................₦50 000
Beginning work-in-progress......₦4 000
Raw materials used..............₦18 000
Indirect labour.................₦4 000
Ending finished goods...........₦16 000
Ending work-in-progress.........₦9 000
Factory supplies used...........₦7 000
Selling expenses................₦25 000
Beginning finished goods........₦21 000
Other factory overheads.........₦19 000What is the cost of goods manufactured?
Answer Details
The cost of goods manufactured is the total cost incurred in the production of finished goods during a particular period. It can be calculated by adding the total manufacturing costs for the period to the beginning work-in-progress and then subtracting the ending work-in-progress.
Total manufacturing costs = Direct labour + Raw materials used + Factory supplies used + Other factory overheads + Indirect labour
Total manufacturing costs = ₦50,000 + ₦18,000 + ₦7,000 + ₦19,000 + ₦4,000 = ₦98,000
Therefore, cost of goods manufactured = Beginning work-in-progress + Total manufacturing costs - Ending work-in-progress
= ₦4,000 + ₦98,000 - ₦9,000 = ₦93,000
Hence, the cost of goods manufactured is ₦93,000.
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