Question

Use the following information for a manufacturer to compute cost of goods manufactured and cost of goods sold:

Answer 1

Answer:

Results are below.

Explanation:

First, we need to calculate the cost of goods manufactured using the following formula:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 42,000 + (28,000 + 70,000 - 30,000) + 86,000 + 38,000 - 35,000

cost of goods manufactured= $199,000

Now, the cost of goods sold:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

We do not have information regarding the beginning and ending finished goods inventory. But, suppose the beginning inventory equals $45,000 and the ending inventory $30,000:

COGS= 45,000 + 199,000 - 30,000

COGS= $214,000