The following data (in thousands of dollars) have been taken from the accounting

Question

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the just-completed year.

Sales

$910
Raw materials, inventory, beginning

$80
Raw materials, inventory, ending

$20
Purchases of raw materials

$100
Direct labor

$130
Manufacturing overhead

$200
Administrative expenses

$160
Selling expenses

$140
Work in process inventory, beginning

$40
Work in process inventory, ending

$10
Finished goods inventory, beginning

$130
Finished goods inventory, ending

$150


15. The cost of goods sold for the year (in thousands of dollars) was

A. $650.
B. $670.
C. $500.
D. $540.

Explanation / Answer

Direct Materials: Raw materials, beginning 80 Plus Purchases of raw materials 100 Less raw materials, ending 20 Equals Direct materials used 160 Plus Direct Labor 130 Plus Manufacturing overhead 200 Equal Manufacturing costs incurred 490 Plus beginning WIP 40 Less ending WIP 10 Equals cost of goods manufactured 520 Answer: c $520

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