The following information was taken from the accounting records of the Brothers Company for the year ended 31/12/2020: Increase in Raw Material Inventory $ 30,000 Decrease in Finished Goods Inventory $ 70,000 Purchases of Raw Materials during the year $ 860,000 Direct Manufacturing Labor $ 400,000 Applied Manufacturing Overhead $ 600,000 Delivery expenses $ 90,000 Beginning and Ending Work In Process $ 0 What is the cost of goods manufactured for the year 2020? O a. $ 1,890,000 O b. $ 1,800,000 O c. $ 1,850,000 d. $ 1,830,000

The following information was taken from the accounting records of the Brothers Company for the year ended 31/12/2020: Increase in Raw Material Inventory $ 30,000 Decrease in Finished Goods Inventory $ 70,000 Purchases of Raw Materials during the year $ 860,000 Direct Manufacturing Labor $ 400,000 Applied Manufacturing Overhead $ 600,000 Delivery expenses $ 90,000 Beginning and Ending Work In Process $ 0 What is the cost of goods manufactured for the year 2020? O a. $ 1,890,000 O b. $ 1,800,000 O c. $ 1,850,000 d. $ 1,830,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

The following information was taken from the accounting
records of the Brothers Company for the year ended
31/12/2020:
Increase in Raw Material Inventory
$ 30,000
Decrease in Finished Goods Inventory
$ 70,000
Purchases of Raw Materials during the year
$ 860,000|
Direct Manufacturing Labor
$ 400,000
Applied Manufacturing Overhead
$ 600,000|
Delivery expenses
$ 90,000
Beginning and Ending Work In Process
$0
What is the cost of goods manufactured for the year 2020?
a. $ 1,890,000
O b. $ 1,800,000
c. $ 1,850,000
O d. $ 1,830,000

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