Question

Blossom Corporation incurred the following costs while manufacturing its product:

Materials used in product $120,000 Advertising expense $45,000

Depreciation on plant 61,000 Property taxes on plant 19,000

Property taxes on warehouse 7,500 Delivery expense 21,000

Labour costs of assembly-line workers 110,300 Sales commissions 35,000

Factory supplies used 25,000 Salaries paid to sales clerks 50,000


Work in process inventory was $10,200 at January 1 and $14,100 at December 31. Finished goods inventory was $60,700 at January 1 and $50,700 at December 31.

What is the cost of goods manufactured and the cost of good sold ?

Answer 1

The Cost of Goods Manufactured (COGM) for Blossom Corporation is $331,400. To determine the Cost of Goods Sold (COGS), the beginning finished goods inventory is added and the ending finished goods inventory is subtracted from COGM, resulting in $341,400 as the COGS.

Step-by-step explanation:

To calculate the Cost of Goods Manufactured (COGM) for Blossom Corporation, we first add up all the manufacturing costs: materials, labor, and overhead.

• Materials used in product: $120,000
• Labor costs of assembly-line workers: $110,300
• Depreciation on plant: $61,000
• Property taxes on plant: $19,000
• Factory supplies used: $25,000
• Plus beginning Work in process inventory: $10,200
• Less ending Work in process inventory: $14,100

The sum of these amounts gives us the total manufacturing costs incurred during the year. Then we subtract the ending work in process inventory to find the COGM.

To find the Cost of Goods Sold (COGS), we take the COGM and adjust for inventory changes:

• COGM
• Plus beginning Finished Goods inventory: $60,700
• Less ending Finished Goods inventory: $50,700

We add the beginning finished goods inventory and subtract the ending finished goods inventory to arrive at COGS.

$120,000 + $110,300 + $61,000 + $19,000 + $25,000 + $10,200 - $14,100 = $331,400 COGM

$331,400 + $60,700 - $50,700 = $341,400 COGS