Assume the following data for Graham Services,an architecture firm,for February: $$\begin{array} { l r }
\text { Bepring materials inventory } & \$ 20,000 \
\text { Beginning wark-in-process inventary } & 40,000 \
\text { Ending work-in-process inventary } & 50,000 \
\text { Ending materials inventory } & 10,000 \
\text { Actual overhead costs } & 100,000 \
\text { Direct materials used } & 60,000 \
\text { Direct labour } & 200,000
\end{array}$$ What is the cost of services sold for February?
A)$330,000
B)$350,000
C)$360,000
D)$370,000

Question

Assume the following data for Graham Services,an architecture firm,for February: $$\begin{array} { l r } 
\text { Bepring materials inventory } & \$ 20,000 \
\text { Beginning wark-in-process inventary } & 40,000 \
\text { Ending work-in-process inventary } & 50,000 \
\text { Ending materials inventory } & 10,000 \
\text { Actual overhead costs } & 100,000 \
\text { Direct materials used } & 60,000 \
\text { Direct labour } & 200,000
\end{array}$$ What is the cost of services sold for February?
A)$330,000
B)$350,000
C)$360,000
D)$370,000

Quizplus · Accepted Answer

The cost of services sold can be calculated by adding together the direct materials used, direct labor, and actual overhead costs, and then adjusting for the change in work-in-process inventory. The calculation is as follows: Direct materials used ($60,000) + Direct labor ($200,000) + Actual overhead costs ($100,000) = $360,000. Then, adjust for the change in work-in-process inventory: Beginning work-in-process inventory ($40,000) - Ending work-in-process inventory ($50,000) = -$10,000. Therefore, $360,000 - $10,000 = $350,000.

Assume the Following Data for Graham Services,an Architecture Firm,for February