(7 points) Ranch Company\'s accounting records reflect the following inventories

Question

(7 points) Ranch Company's accounting records reflect the following inventories: Dec. 31, 2014 Dec. 31, 2013 Raw materials inventory $554,000 $546,000 Work in process inventory 486,000 429,000 Finished goods inventory 270,000 225,000 During 2014, $729,000 of raw materials were purchased, direct labor costs amounted to $1,039,000, and manufacturing overhead incurred was $1,290,000. If Ranch Company's cost of goods manufactured for 2014 amounted to $2,160,000, its cost of goods sold for the year is

Select one: a. $2,205,000. b. $2,115,000. c. $2,152,000. d. $2,103,000.

Explanation / Answer

Cost of goods sold

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

= 2160000 + 225000 - 270000 = $2115000

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