Question

In July, Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000. Overhead totaled $32,000 for the month. Information on inventories was as follows: July 1 July 31Materials $6,200 $7,100Work in process $ 700 $1,200Finished goods $3,300 $2,700 Refer to Figure 2-5. What was the cost of goods sold for July? $70,200 $69,600 $71,300 $71,100

Answer 1

Answer:

$70,200

Explanation:

Given that,

Cost of material purchased = $21,000

Direct labor cost = $18,000

Total overhead = $32,000

Opening and closing balances in the month of July.

Cost of goods sold for July:

= Cost of material purchased + Direct labor cost + Total overhead + (Opening material + opening work in process + opening finished goods - Closing material - Closing work in process - Closing finished goods)

= $21,000 + $18,000 + $32,000 + ($6,200 + $700 + 3,300 - 7,100 - 1,200 - 2,700)

= $70,200