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Determining the Cost of Goods Manufactured

Determining the Cost of Goods Manufactured - Dell first...

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Determining the Cost of Goods Manufactured An example may help show how companies determine the cost of goods manufactured. Assume that on January 1 Dell has a number of computers in various stages of production. In total, these partially completed units are called beginning work in process inventory . The costs the company assigns to beginning work in process inventory are based on the manufacturing costs incurred in the prior period
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Unformatted text preview: . Dell first uses the manufacturing costs incurred in the current year to complete the work that was in process on January 1. It then incurs manufacturing costs for production of new orders. The sum of the direct materials costs, direct labor costs, and manufacturing overhead incurred in the current year is the total manufactur costfor the current period....
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