Question

Pitaya Corporation uses a job costing system. During the current year, the balance in Pitaya's finished goods inventory increased $1,129,000, the balance in Pitaya's work in process inventory decreased $446,000, and Pitaya's total manufacturing costs added were $3,020,000. What are Pitaya's cost of goods manufactured (COGM) and cost of goods sold (COGS)?

a.COGM equals $2,574,000 and COGS equals $1,445,000
b.COGM equals $3,466,000 and COGS equals $2,337,000
c.COGM equals $3,703,000 and COGS equals $3,257,000
d.COGM equals $2,574,000 and COGS equals $3,703,000
e.None of the above

Answer 1

The calculations show that COGM is $2,337,000 and COGS is $1,208,000 for Pitaya Corporation, which does not match any of the provided answer choices, implying an error in the question or a need for additional information.

Step-by-step explanation:

The student is asking how to calculate the Cost of Goods Manufactured (COGM) and the Cost of Goods Sold (COGS) for Pitaya Corporation using the provided data points from their job costing system. To calculate COGM we use the formula:

• Total Manufacturing Costs Added + Decrease in Work in Process Inventory - Increase in Finished Goods Inventory = COGM

By inserting the given values, we get $3,020,000 (Total Manufacturing Costs Added) + $446,000 (Decrease in WIP) - $1,129,000 (Increase in Finished Goods) = $2,337,000 COGM.

To calculate COGS, we adjust COGM for the change in finished goods inventory:

• COGM + Beginning Finished Goods Inventory - Ending Finished Goods Inventory =

We can assume that the increase in the finished goods inventory is equal to the Ending Finished Goods Inventory less the Beginning Finished Goods Inventory. Thus, we can rewrite the equation as COGM - Increase in Finished Goods Inventory = COGS, which results in $2,337,000 - $1,129,000 = $1,208,000 COGS.

However, since none of the provided answer choices match $1,208,000 for COGS, this question seems to contain an error, or additional information is required to accurately determine the correct answer.