The balance in the Finished Goods Inventory account on July 31, 2011, was $41,000 and the June 30, 2011, balance in the Finished Goods Inventory account was $34,000. Cost of goods sold is $200,000 and direct materials used in production total $86,000. How much is cost of goods manufactured?

Question

Quizplus · Accepted Answer

Cost of goods manufactured can be calculated using the following formula: 
Beginning Finished Goods Inventory + Cost of goods manufactured - Ending Finished Goods Inventory = Cost of goods sold 
Plugging in the given values, we get: 
$34,000 (beginning) + Cost of goods manufactured - $41,000 (ending) = $200,000 
Solving for Cost of goods manufactured, we get: 
Cost of goods manufactured = $207,000

The Balance in the Finished Goods Inventory Account on July