Question

Work in process inventory on December 31 of the current year is $44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to $275,000. The total manufacturing costs incurred in the current year are

Answer 1

Answer:

Total manufacturing cost will be $291500

Explanation:

We have given work in progress inventory on December 31 of current year is $44000

It is given that work in progress inventory is increased by 60% during the year

So in beginning work in progress inventory $=\frac{44000}{1.6}=27500$ $

We have given cost of goods manufactured = $275000

Cost of goods manufactured = work in progress inventory + total manufacturing costs incurred - Ending work in progress inventory

So 275000 = 27500 + total manufacturing costs incurred  - 44000

Total manufacturing costs incurred = 275000 - 27500 +44000 = $291500