Question

BigCo manufactures radiators for high end automobiles that it sell to two large auto manufacturers. On...

BigCo manufactures radiators for high end automobiles that it sell to two large auto manufacturers. On December 31, 2014 it had ending finished goods inventory of $120,000 and recorded cost of goods sold of $2,500,000 in its income statement for the year ended December 31, 2014. If beginning finished goods inventory as of January 1, 2014 was $330,000 what would be BigCo's cost of goods manufactured for the year ended December 31, 2014?

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Answer #1

Solution - Calculation of Cost of goods Manufactured

Beginning Inventory on January 1, 2014 = $330000

Cost of goods sold = $2500000

Ending Inventory on December 31, 2014 = $120000

Formula = Cost of goods Manufactured = Cost of goods Sold + Ending Inventory - Beginning Inventory

Cost of Goods Manufactured

Particulars Amount
Cost Of goods sold $2500000
Add : Ending Inventory $120000
Less : Beginning Inventory $330000
Cost of Goods Manufactured for the year ended December 31, 2014 $2290000
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