Rezell Combines, Inc.has $4,000 of finished goods inventory as of December 31, 2016.If beginning finished goods inventory was $2,000 and cost of goods sold was $8,000, how much would Rezell report for cost of goods manufactured?
A)$9,000
B)$2,000
C)$10,000
D)$6,000

Question

Quizplus · Accepted Answer

Cost of goods manufactured is calculated as: Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory = Cost of Goods Sold. Rearranging gives: Cost of Goods Manufactured = Cost of Goods Sold + Ending Finished Goods Inventory - Beginning Finished Goods Inventory = $8,000 + $4,000 - $2,000 = $10,000.