Question

X Company is a manufacturing firm. It incurred the following manufacturing costs in 2019:

Direct material	$104,786
Direct labor	69,693
Overhead	140,920
Total	$315,399

All jobs were started, finished, and sold in 2019, except for the following jobs:

Job	Status	Cost
AA	started and finished in 2019; not sold in 2019	$28,365
BB	started in 2019; not finished in 2019	8,640
CC	finished in 2018; sold in 2019	27,762

What was Cost of Goods Sold in 2019?

Answer 1

To find the cost of goods sold in 2019 we need to find the cost the units which were actually sold in 2019.

The cost of all the jobs of 2019 is given in the sum but among them job AA was started and finished in 2019 but was not sold in 2019. So, we need to subtruct the cost($28365)of this job while calculating cost of goods sold in 2019.

The cost of job BB($8640) will also be subtructed as it was not finished in 2019.

Job CC which was finished in 2018 was sold in 2019 so we need to add the cost of it($27762) while calculating cost of goods sold in 2019 as it was sold in 2019.

So, the total cost of goods sold for the year 2019 will be $(315399-28365-8640+27762)=306156