Question

The following events took place at a manufacturing company for the current year: (1) Purchased $99,000...

The following events took place at a manufacturing company for the current year:

  1. (1) Purchased $99,000 in direct materials.

  2. (2) Incurred labor costs as follows: (a) direct, $60,000 and (b) indirect, $17,600.

  3. (3) Other manufacturing overhead was $111,000, excluding indirect labor.

  4. (4) Transferred 75% of the materials to the manufacturing assembly line.

  5. (5) Completed 60% of the Work-in-Process during the year.

  6. (6) Sold 80% of the completed goods.

  7. (7) There were no beginning inventories.


What is the company's Cost of Goods Sold?

$262,850.00.

$126,168.00.

$157,710.00.

$210,280.00.

Homework Answers

Answer #1
Answer
The Correct Option is B : 126,168
Explanation

Calculation of Cost of Goods Sold

Particulars Amount($)
Purchase of Direct Material $   99,000
Direct Labour Cost $   60,000
Indirect Labour Cost $   17,600
Manufacturing Overhead $ 111,000
Total Cost Incurred $ 287,600
Less: Cost of Material Not Transferred to Manufacturing Assembly Line $   24,750
(25% of $99000)
Cost of WIP $ 262,850
Cost of Completed Goods(60% of WIP) $ 157,710
Cost of Goods Sold(80% of Completed Goods) $ 126,168
Therefore,
Option B is Correct
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