Question

Lopez Corporation incurred the following costs while manufacturing its product.

Materials used in product $122,200 Advertising expense $49,900
Depreciation on plant 69,200 Property taxes on plant 17,600
Property taxes on store 8,590 Delivery expense 28,300
Labor costs of assembly-line workers 113,100 Sales commissions 44,400
Factory supplies used 34,000 Salaries paid to sales clerks 51,300

Work in process inventory was $13,300 at January 1 and $17,200 at December 31. Finished goods inventory was $68,800 at January 1 and $47,900 at December 31.

Required:
a. Compute cost of goods manufactured.
b. Compute cost of goods sold.

Answer 1

a. $352,200

b. $372,100

Step-by-step explanation:

The cost of goods manufactured

Consider only the manufacturing costs

Cost of goods manufactured = $122,200 + $69,200 + $17,600 + $113,100 + $34,000 + $13,300 - $17,200

=$352,200

Cost of goods sold

Add Cost of goods manufactured to the net of Finished inventory balance

Cost of goods sold = $47,900 $68,800 + $352,200 - $47,900

= $372,100