Question

Unimart Precision Manufacturing:

Beginning inventory Merchandise $275,000
Finished goods $450,000
Cost of purchases $500,000
Cost of goods manufactured $900,000
Ending inventory Merchandise $115,000
Finished goods $375,000
Compute cost of goods sold for each of these two companies for the year ended December 31, 2015.
a. Merchandising Business:
b. Manufacturing Business:

Answer 1

A. $660,000

B. $975,000

Step-by-step explanation:

We know that ;

Cost of goods sold = Opening inventory + Purchases - Ending inventory

For Merchandising Business, it would be

= $275,000 + $500,000 - $115,000

= $660,000

For Manufacturing Business, it would be;

= $450,000 + $900,000 - $375,000

= $975,000