Dolan Company's accounting records reflect the following inventories: Dec.31, 2013 Dec.31, 2012
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
Finished goods inventory 190,000 150,000
During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.
Dolan Company's total manufacturing costs incurred in 2013 amounted to.

cost of goods manufactured= $1,770,000

Explanation:

Giving the following information:

Dec.31, 2013 Dec.31, 2012

Raw materials inventory $310,000 $260,000

Work in process inventory 300,000 160,000

During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.

To calculate the cost of goods manufactured, we need to use the following formula:

cost of goods manufactured= beginning WIP + direct materials used + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 300,000 + (310,000 + 600,000 - 260,000) + 500,000 + 480,000 - 160,000

cost of goods manufactured= $1,770,000

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