The following events took place at a manufacturing company for the current year:

Question

The following events took place at a manufacturing company for the current year:

(1) Purchased $101,000 in direct materials.

(2) Incurred labor costs as follows: (a) direct, $62,000 and (b) indirect, $19,600.

(3) Other manufacturing overhead was $116,000, excluding indirect labor.

(4) Transferred 80% of the materials to the manufacturing assembly line.

(5) Completed 65% of the Work-in-Process during the year.

(6) Sold 85% of the completed goods.

(7) There were no beginning inventories.

What is the company's Cost of Goods Sold?

$180,960.

$153,816.

$278,400.

$236,640.

Explanation / Answer

Solution:- $ 153,816

Explanation:-

[$0 + .80(101,000) + 62,000 + ($116,000 + 19,600)].65 = $180,960

.85 ($180,960) = $ 153,816

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