6. The following information was taken from the accounts of the Gorme Manufactur
ID: 2561529 • Letter: 6
Question
6. The following information was taken from the accounts of the Gorme Manufacturing Company for 2006:
Finished goods inventory, 1/1
$50,000
Finished goods inventory, 12/31
33,000
Raw materials used
80,000
Direct labor
60,000
Factory depreciation
35,000
Sales salaries
30,000
Sales returns
8,000
Goods in process, 1/1
70,000
Goods in process, 12/31
90,000
Gorme's cost of goods sold for 2006 was
a.
$130,000
b.
$144,000
c.
$172,000
d.
$170,000
Finished goods inventory, 1/1
$50,000
Finished goods inventory, 12/31
33,000
Raw materials used
80,000
Direct labor
60,000
Factory depreciation
35,000
Sales salaries
30,000
Sales returns
8,000
Goods in process, 1/1
70,000
Goods in process, 12/31
90,000
Explanation / Answer
cost of goods manufactured = 80000 + 60000 + 35000 + 70000 - 90000 = 155000
155000 + 50000 - 33000 = 172000 is the cost of goods sold
so answer is c
c. $172000
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