Carly Manufacturing Company's accounting records reflect the following amounts:?

Carly Manufacturing Company's accounting records reflect the following amounts:
Raw Materials Inventory, Jan 1, 2008 - $260,000
Raw Materials Inventory, Dec 31, 2008 - $310,000
Work in Process Inventory, Jan 1, 2008 - $160,000
Work in Process Inventory , Dec 31, 2008 - $300,000
Finished Goods Inventory, Jan 1, 2008 - $150,000
Finished Goods Inventory, Dec 31, 2008 - $190,000
Raw materials purchased during 2008 - $500,000
Direct labor costs during 2008 - $600,000
Manufacturing overhead incurred during 2008 - $480,000
Carly Manufacturing Company's total manufacturing costs incurred in 2008 is ?

Total manufacturing costs = Direct labor + Direct materials + Factory Overhead

Direct materials used:
Raw Materials Inventory, Jan 1, 2008 - $260,000
+ Raw materials purchased during 2008 - $500,000
- Raw Materials Inventory, Dec 31, 2008 - ($310,000)
= $450,000

Direct labor costs during 2008 - $600,000

Manufacturing overhead incurred during 2008 - $480,000

So total manufacturing costs = $1,530,000

Cost of goods manufactured = Total manufacturing costs + opening WIP - ending WIP
= $1,530,000 + $160,000 - $300,000
= $1,390,000

Source(s):

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