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Nana76 [90]
3 years ago
10

During the first month of operations, a manufacturer incurs the following costs related to activities within its factory:

Business
1 answer:
oksian1 [2.3K]3 years ago
3 0

Answer:

$68,000

Explanation:

The costs of goods sold  ( COGS)is calculated as follows.

COGS = opening stock + Purchases - Closing stock

This was the first month of operation; hence there was opening stock.

The material used to produce 5000 units were

Direct materials $15,000 +  Direct Labor $30,000 + Manufacturing overhead $40,000 = $85,000

The cost per units = $85,000 /5000 units

=$17 per units

4000 units were sold, the COGS

=$17 x 4000

=$68,000

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