Question

Calculate the cost of goods sold using the following information: Direct materials $ 298,500 Direct labor 132,000 Factory overhead costs 264,000 General and administrative expenses 85,500 Selling expenses 48,800 Work in Process inventory, January 1 118,500 Work in Process inventory, December 31 125,900 Finished goods inventory, January 1 232,100 Finished goods inventory, December 31 238,700

Answer 1

COGS= $680500

Step-by-step explanation:

The cost of goods sold refers to the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the goods along with the direct labor costs used to produce the goods. It excludes indirect expenses, such as distribution costs and sales force costs.

COGS=Beginning Inventory+Production during period−Ending Inventory

We need to calculate the production during the period.

Cost of manufactured period= Beginning work in progress inventory+ direct materials + direct labor + factory overhead - ending work in progress

Cost of manufactured period= 118,500+ 298,500 + 132,000 + 264,000 - 125,900 =$687,100

COGS= 232,100 + 687,100 - 238,700=$680500

Answer 2

Cost of Goods Sold 680,500

Step-by-step explanation:

Adding the cost component of materials, labor and overhead we got the total cost added during the period.

Then, we work with the work in process to obtain the cost of good manufactured.

Finally, with the cost of good manufactured and the finished goods inventory we solve for COGS

cost added

materials 298,500

direct labor 132,000

manufacturing overhead 264,000

total cost added during the period 694,500

WIP beginning 118,500

cost added 694,500

WIP ending (125,900)

Cost of Goods Manufactured 687,100

Finished Goods inventory beginning 232,100

Cost of goods manufactured 687,100

Finished Goods inventory ending (238,700)

Cost of Goods Sold 680,500