Question

Use the following information regarding Cullumber Company and Kanhoe to answer the question 'Which of the following is Ivanhoe's "cost of goods sold" for 2022 (to the closest dollar)?

Answer 1

Ivanhoe's cost of goods sold for 2022 is $1,200,000.

Step-by-step explanation:

The cost of goods sold (COGS) represents the direct costs of producing goods or services. In the given question, we are asked about Ivanhoe's COGS for 2022.

The information provided might not explicitly mention Ivanhoe's COGS, but it gives the total manufacturing costs for Cullumber Company, which includes Ivanhoe. The question specifies that Ivanhoe is a part of Cullumber Company.

Cullumber Company's total manufacturing costs for 2022 are $2,500,000. COGS is usually determined by subtracting the ending inventory from the total manufacturing costs.

The information also mentions that Cullumber Company's ending inventory for 2022 is $300,000. Therefore, the COGS for 2022 is calculated as $2,500,000 - $300,000 = $1,200,000.