Use the Following Information to Compute the Cost of Goods

question 102

Multiple Choice

Use the following information to compute the cost of goods manufactured. Assume that all raw materials used were traceable to specific units of product: $\begin{array} { l r } \text { Beginning raw materials } & 5,500 \\\text { Ending raw materials } & 4,000 \\\text { Direct labor } & 12,250 \\\text { Raw material purchases } & 7,400 \\\text { Depreciation on factory equipment } & 6,500 \\\text { Factory repairs and maintenance } & 3,300 \\\text { Beginning finished goods inventory } & 10,200 \\\text { Ending finished goods inventory } & 8,900 \\\text { Beginning work in process inventory } & 5,700 \\\text { Ending work in process inventory } & 6,300\end{array}$

• A) $36,650.
• B) $30,950.
• C) $30,650.
• D) $30,350.
• E) $31,650.

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Definitions:

Activity Cost Pools

Groups of individual costs driven by the same cost drivers, used in activity-based costing to allocate costs more accurately.

Cost Per Unit

The total cost incurred by a company to produce, store, and sell one unit of a particular product or service.

Predetermined Overhead Rate

A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period. It is computed by dividing the estimated total manufacturing overhead cost for the period by the estimated total amount of the allocation base for the period.

Costing System

A method for assessing and allocating costs of production, typically involving direct costs, indirect costs, and overheads.