Laflin Company reported the following year-end information: Beginning work in process inventory $ 1 , 080 , 000 Beginning raw materials inventory 300 , 000 Ending work in process inventory 900 , 000 Ending raw materials inventory 480 , 000 Raw materials purchased 960 , 000 Direct labor 900 , 000 Manufacturing overhead 720 , 000 \begin{array} { l r } ext { Beginning work in process inventory } & \$ 1,080,000 \ ext { Beginning raw materials inventory } & 300,000 \ ext { Ending work in process inventory } & 900,000 \ ext { Ending raw materials inventory } & 480,000 \ ext { Raw materials purchased } & 960,000 \ ext { Direct labor } & 900,000 \ ext { Manufacturing overhead } & 720,000\end{array} Beginning work in process inventory Beginning raw materials inventory Ending work in process inventory Ending raw materials inventory Raw materials purchased Direct labor Manufacturing overhead $1 , 080 , 000 300 , 000 900 , 000 480 , 000 960 , 000 900 , 000 720 , 000 Laflin Company's cost of goods manufactured for the year isA) $2400000.B) $2580000.C) $2220000.D) $2760000.

Question

Laflin Company reported the following year-end information:    Beginning work in process inventory  $ 1 , 080 , 000  Beginning raw materials inventory  300 , 000  Ending work in process inventory  900 , 000  Ending raw materials inventory  480 , 000  Raw materials purchased  960 , 000  Direct labor  900 , 000  Manufacturing overhead  720 , 000 \begin{array} { l r } 	ext { Beginning work in process inventory }  &  \$ 1,080,000 \	ext { Beginning raw materials inventory }  &  300,000 \	ext { Ending work in process inventory }  &  900,000 \	ext { Ending raw materials inventory }  &  480,000 \	ext { Raw materials purchased }  &  960,000 \	ext { Direct labor }  &  900,000 \	ext { Manufacturing overhead }  &  720,000\end{array}  Beginning work in process inventory   Beginning raw materials inventory   Ending work in process inventory   Ending raw materials inventory   Raw materials purchased   Direct labor   Manufacturing overhead  ​ $1 , 080 , 000 300 , 000 900 , 000 480 , 000 960 , 000 900 , 000 720 , 000 ​   Laflin Company's cost of goods manufactured for the year isA)  $2400000.B)  $2580000.C)  $2220000.D)  $2760000.

Sofia Rodriguez · Accepted Answer

Final Answer : B, Explanation :  The cost of goods manufactured is calculated as: Beginning WIP Inventory + Total Manufacturing Costs - Ending WIP Inventory. Total Manufacturing Costs = Direct Materials Used + Direct Labor + Manufacturing Overhead. Direct Materials Used = Beginning Raw Materials Inventory + Raw Materials Purchased - Ending Raw Materials Inventory. Plugging in the values: Direct Materials Used = $300,000 + $960,000 - $480,000 = $780,000. Total Manufacturing Costs = $780,000 + $900,000 + $720,000 = $2,400,000. Cost of Goods Manufactured = $1,080,000 + $2,400,000 - $900,000 = $2,580,000.

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