Rediger Inc., a manufacturing Corporation, has provided the following data for the month of June. The balance in the Work in Process inventory account was $22,000 at the beginning of the month and $17,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $55,000 and direct labor cost of $28,000. The actual manufacturing overhead cost incurred was $53,000. The manufacturing overhead cost applied to Work in Process was $51,000. The cost of goods manufactured for June was:

To calculate the **Cost of Goods Manufactured (COGM)**, we will use the following formula:

\[
\text{COGM} = \text{Total Manufacturing Costs} + \text{Beginning Work in Process Inventory} - \text{Ending Work in Process Inventory}
\]

Where:
- **Total Manufacturing Costs** = Direct Materials + Direct Labor + Applied Manufacturing Overhead

Let's calculate each component step-by-step:

1. **Total Manufacturing Costs**:
   \[
   \text{Total Manufacturing Costs} = \text{Direct Materials} + \text{Direct Labor} + \text{Applied Manufacturing Overhead}
   \]
   Substituting the given values:
   \[
   \text{Total Manufacturing Costs} = 55,000 + 28,000 + 51,000 = 134,000
   \]

2. **COGM**:
   \[
   \text{COGM} = 134,000 + 22,000 - 17,000 = 139,000
   \]

Thus, the **Cost of Goods Manufactured (COGM)** for June is **$139,000**.

Would you like more details or have any questions?

Here are 5 related questions to expand on this:

1. How is manufacturing overhead applied, and why is it different from the actual overhead incurred?
2. What happens to the difference between actual and applied manufacturing overhead?
3. How does Work in Process Inventory affect the calculation of Cost of Goods Manufactured?
4. What is the significance of the cost of goods manufactured in a manufacturing company’s financial statements?
5. How can a company control its manufacturing overhead costs effectively?

**Tip:** Always distinguish between applied and actual manufacturing overhead, as this difference impacts cost variance analysis.

Calculate the Cost of Goods Manufactured (COGM) for Rediger Inc. in June. Given data includes direct materials cost of $55,000, direct labor cost of $28,000, applied manufacturing overhead of $51,000, and work-in-process inventory balances. Learn step-by-step how to determine COGM using cost accounting formulas.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation