Question

At the beginning of the year, the Work-in-Process Inventory account had a balance $27,000. During the year, $72,000 of direct materials were used in production and $22,000 of direct labor costs were incurred. Manufacturing overhead amounted to $83,000. The cost of goods manufactured was $179,000.

At the beginning of the year, the Finished Goods Inventory had a balance of $33,000. At the end of the year, the Finished Goods Inventory had a balance of $40,000.

What is cost of goods sold for the year?

Answer 1

The cost of goods sold for the year is $172,000.

Step-by-step explanation:

To calculate the cost of goods sold for the year, we need to determine the change in the Finished Goods Inventory balance. In this case, the change is an increase of $7,000 ($40,000 - $33,000). This represents the cost of goods sold during the year.

We can also calculate the cost of goods sold using the formula: Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory. Using the given information, the calculation would be: $33,000 + $179,000 - $40,000 = $172,000. Therefore, the cost of goods sold for the year is $172,000.