Question
I am trying to learn how to Calculate Cost of goods manufactured. If I read correctly, it is Cost of Direct materials used, + Cost
I am trying to learn how to Calculate Cost of goods manufactured. If I read correctly, it is Cost of Direct materials used, + Cost of direct labor, + Cost of MOH= Total manufacturing costs + add beginning WIP - Less ending WIP = Cost of goods manufactured.
I June 30
July 31
Inventories
Raw materials
62,000
75,000
Goods in process
85,000
95,000
Finished goods
103,000
58,000
Activities and information for July
Raw materials purchases by cash
510,000
Factory payroll by cash
745,000
Factory overhead
Indirect materials
24,000
Indirect labor
132,000
Other overhead costs
220,000
Sales in cash
3,500,000
Predetermined overhead rate based on direct labor cost
52%
I have already figured this out
Part A: Cost of Direct Materials used:
Beginning Raw Materials Inventory + Direct Materials bought - Ending raw materials inventory= Cost of Direct materials for production.
75,000 - 510,000 = 435,000
Part B: Cost of Direct Labor used
Beginning finished goods + COG manufactured - Less ending finished goods inventory = Cost of goods sold. (COGS).
58,000 + -58000
What am I not understanding about This third part?
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