Question

During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What is Silverman's cost of goods sold for the year?

Answer 1

The correct answer is $30,000.

Step-by-step explanation:

According to the scenario, the computation of the given data are as follows

We can calculate the cost of goods sold by using following formula:

Cost of goods sold = Cost of goods Manufactured - Amount of finished goods

Where, Cost of goods manufactured = $14,000 + $17,000 + $19,000

= $50,000

And amount of finished goods = ($50,000 ÷ 5,000) × ( 5,000 - 3,000)

= $10 × 2,000

= $20,000

By putting the value, we get

Cost of goods sold = $50,000 - $20,000

= $30,000