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Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:
Direct materials used $270,000 Beginning work in process $40,000
Direct labor 200,000 Ending work in process 20,000
Manufacturing overhead 250,000 Beginning finished goods 50,000
Operating expenses 350,000 Ending finished goods 30,000
(A) (B)
a. $700,000 $740,000
b. $720,000 $700,000
c. $720,000 $740,000
d. $740,000 $760,000
Expert Answer
Solution: The correct option is c. (A) = $720,000 and (B) = $740,000
(A) Computation of total manufacturing costs:
Total manufacturing cost = Cost of direct materials used + Direct labor cost + Manufacturing overhead costs
= $270,000 + 200,000 + 250,000 = $720,000
(B) Computation of costs of goods manufactured:
Costs of goods manufactured = Beginning work in process+ total manufacturing costs – Ending work in process
= $40,000 + 720,000 – 20,000 = $740,000
