The question was not written properly. Here is the appropriate form of question:
The following events took place at a manufacturing company for the current year:
(1) Purchased $115,000 in direct materials.
(2) Incurred labor costs as follows: (a) direct, $76,000 and (b) indirect, $33,600.
(3) Other manufacturing overhead was $127,000, excluding indirect labor.
(4) Transferred 75% of the materials to the manufacturing assembly line.
(5) Completed 60% of the Work-in-Process during the year.
(6) Sold 80% of the completed goods.
(7) There were no beginning inventories.
1- What is the company's Cost of Goods Sold?
Options:
a. $193,710
b. $154,968
c. $322,850
d. $258,280
Answer:
1- b. $154,968
Explanation:
1- Cost of goods sold (COGS) is the is the expense of securing or assembling the items that an organization sells during a period, so the main costs remembered for the measure are those that are directly attached to the creation of the items, including the expense of work (labor cost), materials, and assembling overhead.
0.6*[$0 + 0.75*($115,000) + $76,000 + ($127,000 + $33,600)] (because completed 60% of the Work-in-Process during the year)
= $193,710
80% of $193,710 (because sold 80% of the completed goods)
0.8*$193,710
= $154,968