Question

Julia manufactures cleaning wipes in Skowhegan, Maine. Her firm had the following information.

$10,385 for direct materials and $11,400 for production workers' wages.

Lease payments and utilities on the production facilities amounted to $10,400 while general, selling, and administrative expenses totaled $3,100. The company produced 7,850 units and sold 4,900 units at a price of $6.60 a unit.

The cost of goods sold for the year was?

Multiple Choice

• $15,533

• $32,185

• $24,885

• $20,090

Answer 1

Answer :

given information

direct materials=$10,385

production workers' wages =$11,400

Lease payments and utilities on the production facilities=$10,400

General sellimg & administartive expenses =$3,100

Units produced =7850

Units sold =4900

From the above data ,

cost of goods sold =(Direct material+production workers' wages +Lease payments and utilities on production facilities)*Units sold/Total units produced

Cost of goods sold =($10,385+$11,400+$10,400)*4900/7850 =$32,185*4900/7850 = $20,090

Note : general ,selling & administrative expense are not form part of cost of goods sold as they are administartive in nature

So answer is $20,090