Question

Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $129,600 Advertising expense $49,600 Depreciation on plant 70,200 Property taxes on plant 21,000 Property taxes on store 7,690 Delivery expense 31,400 Labor costs of assembly-line workers 120,400 Sales commissions 42,400 Factory supplies used 29,200 Salaries paid to sales clerks 54,400 Work in process inventory was $14,400 at January 1 and $17,000 at December 31. Finished goods inventory was $70,200 at January 1 and $46,400 at December 31. Compute cost of goods manufactured. Cost of goods manufactured $ Compute cost of goods sold. Cost of goods sold $

Answer 1

Answer: Cost of goods manufactured = $3,67,800

Cost of goods sold = $3,91,600

Explanation:

Manufacturing overhead = Depreciation on plant + Factory supplies used + Property tax on plant

                                          = $70,200 +  $29,200 + $21000

                                          = $120,400

Total manufacturing cost = Material used in production + Labour cost + Manufacturing overhead

                                          = 129,600 + 120,400 + 120,400

                                          = $370,400

Cost of goods manufactured = Total manufacturing cost + Beginning work in process -  Ending work in process

                                                = 370,400 + 14,400 - 17,000

                                                = $3,67,800

Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory

                                = 367,800 + 70,200 - 46,400

                                = $3,91,600