Question

At the beginning of the current accounting period Blazer Company had a $40,000 balance in its Finished Goods Inventory account. During the period cost of goods manufactured amounted to $280,000. The ending balance in the Finished Goods Inventory account was $42,000. Based on this information the amount of cost of goods sold is _______.

Answer 1

Based on this information the amount of cost of goods sold is $278,000.

Step-by-step explanation:

The Cost Of Goods Sold (COGS) are the costs directly related to the production of goods that a company sells. To find this value, we have the following formula:

• 
  `COGS = Beginning Inventory + Purchases during period - Final inventory`

The beginning inventory is the inventory that was not sold from a previous period, plus the purchases during the period make the total inventory that was available for sale during the period at hand. To that, we substract the Final inventory, which were the products that were not sold during this period. The result is the inventory that was effectively sold. Replacing the values, we have:

• 
  `COGS = 280,000 + 40,000 - 42,000\\COGS = 278,000`

The Cost Of Goods Sold for the period is $278,000.