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Towson Manufacturing had a Work in Process balance of $70,000 on January 1, 2018. The year...

Towson Manufacturing had a Work in Process balance of $70,000 on January 1, 2018. The year end balance of Work in Process was $108,000 and the Cost of Goods Manufactured was $800,000. Use this information to determine the total manufacturing costs incurred during the fiscal year 2018. (Round enter as whole dollars only.)

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Expert Solution

We are given the following:

Work-in-process balance on January 1, 2018 $70,000

Work-in-process balance on December 31, 2018 $108,000

Cost of goods manufactured $800,000

Format for cost of production is as follows:

Opening balance of raw materials XXXX

Add: Purchases XXXX

---------

XXXX

Add: Carriage inwards XXXX

--------

Raw materials available for production XXXX

Less: Closing balance of raw materials (XXXX)

---------

Cost of raw materials consumed XXXX

Add: Direct Labor XXXX

Add: Direct factory expenses XXXX

----------

Gross manufacturing cost XXXX

Add: Opening stock of work-in-process XXXX

----------

XXXX

Less: Closing stock of work-in-process (XXXX)

---------

Cost of production/goods manufactured XXXX

=====

Therefore, Gross factory cost = Cost of production + Closing stock of work-in-process - Opening stock of work-in- process

Substituting the values given, we proceed as follows:

Total manufacturing cost = $800,000 + $108,000 - $70,000

= $838,000

Thus, Towson Manufacturing incurred a total manufacturing costs of $838,000 for the fiscal year 2018.

ekkarill92 answered 1 year ago

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