5. The following events took place at a manufacturing company for the current ye

Question

5. The following events took place at a manufacturing company for the current year (1) Purchased $112,000 in direct materials (2) Incurred labor costs as follows: (a) direct, $73.000 and (b) indirect, $30.600 (3) Other manufacturing overhead was $124,000, excluding indirect labor (4) Transferred 75% of the materials to the manufacturing assembly line (5) Completed 60% of the work-in-Process during the year (6) Sold 80% of the completed goods (7) There were no beginning inventories What is the company's Cost of Goods Sold? $186960 O $149.568 O $249280 O $311.600

Explanation / Answer

Answer – Cost of goods sold = $149,568

Determination of cost of goods sold:

Materials transferred to manufacturing assembly – 75% of $112,000 = $84,000

Add: Direct labor $73,000

Add: manufacturing overhead $154,600 ($124,000 + $30,600)

Total $311,600

60% completed Work in process$186,960 (60% of 311,600)

Cost of goods sold = 80% of completed goods = 80% of 186,960 = $149,568

Hence, cost of goods sold = $149,568

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.