Question

Tucker Company's Work in Process account decreased by $1,000, while its Finished Goods Inventory account increased by $500. Assuming total manufacturing costs were $5,000, what was the company's cost of goods sold amount?

Answer 1

Answer:

$5500.

Explanation:

The computation of the cost of goods sold is shown below:

Let us assume beginning WIP be $2000

So,  

ending WIP is

= ($2000 - $1000)

= $1000

And,  

Let us assume the beginning finished goods be $1000

So, the ending finished goods is

= ($1000 + $500)

= $1500

Now as we know that  

Cost of goods manufactured = Total manufacturing cost + Beginning WIP - Ending WIP

= $5000 + $2000 - $1000

= $6000

Now

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

= $6000 + $1000 - $1500

 =$5500.