The accounting records for Ferguson Manufacturing revealed that the company began the month of September with a finished-goods inventory of $150,000. The finished-goods inventory at the end of September was $70,000 and the cost of goods sold during the month was $125,000. The cost of goods manufactured during September was:
A)$45,000.
B)$55,000.
C)$205,000.
D)$275,000.
E)$345,000.

Question

Quizplus · Accepted Answer

The cost of goods manufactured is equal to the cost of goods sold plus the change in finished-goods inventory. The change in finished-goods inventory is the ending finished-goods inventory minus the beginning finished-goods inventory. Therefore, the cost of goods manufactured is $125,000 + $70,000 - $150,000 = $45,000.

The Accounting Records for Ferguson Manufacturing Revealed That the Company