Answer:
<u>Statement of Cost of Goods sold</u>
Cost of Goods Sold
Beginning Finished Goods Inventory $47,500
Cost of Goods Manufactured $389,100
Less: Ending Finished Goods Inventory -<u>$39,000</u>
Cost of Goods sold $397,600
Cost of Goods Manufactured
Direct Materials Used: $128,000
Direct Material inventory, Beginning $6,000
Less: Raw Materials inventory Ending<u> -$5,900 </u>
Direct Materials used $128,100
Direct labor $53,000
Variable overhead: $25,000
Fixed overhead <u>$185,000</u>
Total manufacturing overhead <u>$210,000</u>
Total Manufacturing Cost $391,100
Add: Work in process inventory Beginning $14,000
Less: Work in process inventory Ending <u>-$16,000</u>
Cost of goods manufactured 389,100
2. What if the beginning inventory of finished goods decreased by $3,750? What would be the effect on the cost of goods sold?
Cost of Goods Sold
Beginning Finished Goods Inventory ($47,500-$3,750) $43,750
Cost of Goods Manufactured $389,100
Less: Ending Finished Goods Inventory -<u>$39,000</u>
Cost of Goods sold $393,850