Question

The following information is available for Ethtridge Manufacturing Company for the month ending July 31

Cost of direct materials used in production $1,150,000

Direct labor 966,000

Work in process inventory, July 1 316,400

Work in process inventory, July 31 355,500

Total factory overhead 490,500

Determine Ethtridge’s cost of goods manufactured for the month ended July 31.

Answer 1

Cost of goods manufactured : The costs incurred for producing the goods throughout the time period are referred to as the cost of goods manufactured. To calculate the cost of goods manufactured, which is then used to calculate the cost of goods sold, a statement of the cost of goods manufactured is prepared. 

Calculation of cost of goods manufactured for the month ended July 31

Particulars	Amount$	Amount$
Work in process inventory july 1		316,400
Add : Manufacturing cost incurred during July
Cost of direct materials used	11,50,000
Direct labor	966,000
Factory overhead	490,500
Total manufacturing costs incurred		26,06,500
Total manufacturing costs		29,22,900
Less  :  Work in process inventory,July 31		355,500
Cost of goods manufactured		25,67,400

 

Therefore, the cost of goods manufactured of Ethridge Manufacturing Company  for the month ending July 31 is $25,67,400