Answer:
B) $420
Explanation:
Raw materials inventory, beginning - $50
<em>add:</em> purchases of raw materials - $150
<em>less: </em>raw materials inventory, ending - $40
equals: raw materials used - $160
<em>add:</em> direct labor - $140
<em>add: </em>manufacturing overhead - $160
equals: Total Manufacturing Cost - $460
<em>add</em>: work in process inventory, beginning - $30
equals: Cost of Goods Put into Process = $490
<em>less: </em>work in process inventory, ending - $50
equals: Cost of Goods Manufacture - $440
<em>add:</em> finished goods inventory, beginning - $80
equals: Cost of Goods Available for Sale - $520
<em>less: </em>finished goods inventory, ending - $100
equals: <u>Cost of Goods Sold - $420</u>
Cost of goods sold (COGS) refers to the direct costs attributable to the production of the goods sold in a company.
This amount includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good.
It excludes indirect expenses, such as distribution costs and general and selling expenses.
