Answer (C) is correct . COGM equals all manufacturing costs incurred during the period, plus BWIP, minus EWIP. Materials used equals $144,000 ($30,000 BI + $160,000 purchased – $2,000 discounts – $44,000 EI). Thus, manufacturing costs incurred during the period equal $494,000 ($144,000 materials used + $200,000 DL + $150,000 OH), and COGM equals $504,000 ($494,000 + $80,000 BWIP – $70,000 EWIP).
Answer (A) is incorrect because This amount results from reversing the effect of the change in WIP.
Answer (B) is incorrect because This amount does not consider the change in WIP.
Answer (D) is incorrect because This amount does not consider the change in materials inventory.
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