Answer:
Cost of Goods Manufactured = 120,000+110,000+(23,000+14,000+60,000)+12,000-15,500 = $323,500
Cost of Goods Sold = 60,000 + 323,500 - 45,600
Explanation:
Lopez Corporation incurred the following costs while manufacturing its product.
Materials used in product $120,000
Advertising expense $45,000
Depreciation on plant 60,000
Property taxes on plant 14,000
Property taxes on store 7,500
Delivery expense 21,000
Labor costs of assembly-line workers 110,000
Sales commissions 35,000
Factory supplies used 23,000
Salaries paid to sales clerks 50,000
Work in process inventory was $12,000 at January 1 and $15,500 at December 31.
Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.
Compute cost of goods manufactured.
Cost of goods Sold
1. Cost of goods manufactured.
COGM = Direct Material + Direct Labor + Manufacturing Overhead + Beginning Work In process - Ending Work in process.
COGM = 120,000+110,000+(23,000+14,000+60,000)+12,000-15,500 = $323,500
2. Cost of Goods Sold
COGS = Beginning Inventory of Finished Goods + Cost of Goods Manufactured - Ending Inventory of Finished Goods
COGS = 60,000 + 323,500 - 45,600
