Question

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.

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