Question

Benson Inc.'s accounting records reflect the following inventories:

		Dec. 31, 2016		Dec. 31, 2017
Raw materials inventory	$ 80,000		$ 64,000
Work in process inventory	104,000		116,000
Finished goods inventory	100,000		92,000

During 2017, Benson purchased $1,450,000 of raw materials, incurred direct labor costs of $250,000, and incurred manufacturing overhead totaling $160,000.

Assume Benson's cost of goods manufactured for 2017 amounted to $1,660,000. How much would it report as cost of goods sold for the year?

Question 6 options:

	$1,760,000
	$1,668,000
	$1,568,000
	$1,652,000

Answer 1

Cost of goods sold are the cost of goods that have been sold during the particular period.

we will find cost of goods sold using following formula

Cost of goods manufactured	$1,660,000
Add:Beginning finished goods inventory	$100,000
less: Ending Finished Goods Inventory	($92,000)
Cost of goods sold	$1,668,000	[$1,660,000+$100,000-$92,000]

Answer B) $1,668,000

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