The following information is available for Walker Industries:
Beginning work in process inventory $30,000
Ending work in process inventory $25,000
Cost of goods manufactured $180,000
Compute total current manufacturing cost?
To compute the total current manufacturing cost, you need to consider the beginning work in process (WIP) inventory, the ending WIP inventory, and the cost of goods manufactured.
Current Manufacturing Cost = Beginning WIP + Cost of Goods Manufactured - Ending WIP
1. Beginning WIP Inventory: $30,000
This represents the value of unfinished goods at the beginning of the accounting period.
2. Cost of Goods Manufactured: $180,000
This is the total cost associated with the production of finished goods during the accounting period. It includes direct materials, direct labor, and manufacturing overhead costs.
3. Ending WIP Inventory: $25,000
This represents the value of unfinished goods at the end of the accounting period.
Now, let's calculate the total current manufacturing cost:
Current Manufacturing Cost = Beginning WIP + Cost of Goods Manufactured - Ending WIP
= $30,000 + $180,000 - $25,000
= $205,000
Therefore, the total current manufacturing cost for Walker Industries is $205,000.
To compute the total current manufacturing cost, follow these steps:
Step 1: Calculate the total manufacturing cost by adding the beginning work in process inventory to the cost of goods manufactured.
Total manufacturing cost = Beginning work in process inventory + Cost of goods manufactured
Total manufacturing cost = $30,000 + $180,000
Total manufacturing cost = $210,000
Therefore, the total current manufacturing cost for Walker Industries is $210,000.