Question

Information from the records of Chrome Ponies Enterprises for June 2018 is as follows:

a) Sales $41,000
b) Direct Labor $10,000
c) Selling and admin. expenses $7,000
d) Direct materials purchases $5,600
e) Factory overhead $13,500
Inventories
a) June 1, 2018 June 30, 2018
b) Direct materials $1,200 $1,300
c) Work in process $2,500 $2,800
d) Finished goods $2,300 $1,900
What is the cost of goods sold?
a) $36,500
b) $28,600
c) $29,100
d) $29,500

Answer 1

The cost of goods sold (COGS) for Chrome Ponies Enterprises, calculated using the provided inventory and cost figures, is $30,400, which does not match any of the options given in the question.

Step-by-step explanation:

To calculate the cost of goods sold (COGS) for Chrome Ponies Enterprises, you need to consider the beginning inventories, purchases/additional costs, and the ending inventories for the period. The formula for COGS is: Beginning Inventory + Purchases - Ending Inventory.

From the information provided: Beginning Direct Materials: $1,200 = COGS: $30,400 The calculation shows that the cost of goods sold is $30,400, which doesn't match any of the provided options a) $36,500 b) $28,600 c) $29,100 d) $29,500. Therefore, there must be an error in the question or the options provided.