Question

During FY 2018, Towson Manufacturing had a beginning finished goods inventory of $20,000 & ending finished goods inventory of $18,500. Beginning work-in-process was $18,000 and ending work-in-process was 11,500. Factory overhead was $22,500. The total manufacturing costs amounted to $216,000. Use this information to determine the FY 2018 Cost of Goods Sold. (Round enter as whole dollars only.)  

Answer 1

Cost of Goods Manufactured = Total Manufacturing Cost (excluding Factory Overhead as assumption) + Factory Overhead + Beginning Work-in-Process - Ending Work-in-Process

= $216,000 + $22,500 + $18,000 - $11,500

= $245,000

Therefore, Cost of Goods Sold = Cost of Goods Manufactured + Beginning Finished Goods Inventory - Closing Finished Goods Inventory

= $245,000 + $20,000 - $18,500

= $246,500

Note: Factory Overhead is a part of Total Manufacturing Cost. Since Total Manufacturing Cost and Factory Overhead are given separately, it was assumed that Factory Overhead is excluded from Manufacturing Cost.

If Factory Overhead is assumed to be a part of Total Manufacturing Cost then Cost of Goods Sold = $224,000