Answer:
The correct option is c: $665,000
Explanation:
Cost of goods manufactured:
- The cost of goods manufactured (COGM), also called cost of goods completed.
- It calculates the total value of inventory that was produced during the period and is ready for sale.
- In other words, this is the total amount of expenses incurred to turn work in process inventory into finished goods.
Calculation method:
The cost of goods manufactured equation is calculated as follows:
- adding the total manufacturing costs; including all direct materials, direct labor, and factory overhead;
- to the beginning work in process inventory and
- subtracting the ending goods in process inventory.
- This formula will leave you with only the cost of goods that were completed during the period.
Calculation:
Opening work in process inventory = $130,000
Closing work in process inventory = $145,000
Total manufacturing cost = $680,000
Total cost of goods manufactured = Opening WIP + Total manufacturing cost - Closing WIP
Total cost of goods manufactured = $130,000 + $680,000 - $145,000
Total cost of goods manufactured = $665,000
