Question

Given:
Beginning WIP $ 70,000
Ending WIP $ 10,000
Beginning finished goods $ 80,000
Ending finished goods $ 60,000
Adjusted gross profit $ 230,000
Sales revenue $ 500,000
Selling and administrative expenses $ 145,000
Underapplied Overhead $ 70,000
Calculate the cost of goods manufactured.

Answer 1

1. Adjusted Cost of goods sold

Adjusted cost of goods sold = Sales revenue - Adjusted Gross profit

Adjusted cost of goods sold = $500,000 - $230,000 = $270,000

2. Unadjusted cost of goods sold

Unadjusted cost of goods sold = Adjusted cost of goods sold - Underapplied overhead

Unadjusted cost of goods sold = $270,000 - $70,000 = $200,000

3. Cost of goods manufactured

Cost of goods manufactured = Unadjusted cost of goods sold - Beginning finished goods + Ending finished goods

Cost of goods manufactured = $200,000 - $80,000 + $60,000 = $180,000

Cost of goods manufactured = $180,000

All the best...