The following information was obtained from the accounting records of Stevenson

Question

The following information was obtained from the accounting records of Stevenson Incorporated materials purcha Direct materials used Direct manufacturing labor costs Indirect manufacturing labor costs Selling expenses Administrative expenses Factory utilities costs Rental cost of factory machines Work in process inventory, beginning Work in process inventory, end Finished goods inventory, beginning Finished goods inventory, end $80,000 $54,000 $12,000 $11,000 $16,000 $22,000 $20,000 $50,000 $10,000 $30,000 What is Cost of Goods Sold? A) $57,000 B) $77,000 C) $127,000 D) $147,000 Answer: C Diff: 2 LO: 4-6 AACSB: Analytic skills Learmning outcome. Define basic managerial accounting concepts and prepare an income statement for 9) In a merchandising firm, the computation of Cost of Goods Sold does NOT use A) Merchandise Inventory, beginning balance B) Merchandise Inventory, ending balance C) purchases of raw materials D) purchases of merchandise inventory Answer C Oiff: 1 LO: 46 AACSB: Analytic skills Learning Outcome: Define different types of organizations

Explanation / Answer

9. While calculating cost of goods sold, purchase of raw material will not consider. only material used will consider.

Direct material used $    54,000 Add:Direct manufacturing labour cost $    12,000 Add: Manufacturing overhead Indirect manufacturing labour cost $ 11,000 Factory utilities cost $ 20,000 Rental cost of factory machines $ 50,000 Total manufacturing overhead $    81,000 Cost of goods manufactured $ 147,000 Add: Beginning finished goods inventory $    10,000 Less: Ending finished goods inventory $ (30,000) Cost of goods sold $ 127,000

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