Hoovern Company provided the following data for May: What is the cost of goods sold?
$$\begin{array} { l l }
\text { Direct materials } & \$ 60,000 \
\text { Direct labour } & \$ 30,000 \
\text { Overhead } & \$ 80,000 \
\text { Beginning finished goods } & \$ 15,000 \
\text { Ending finished goods } & \$ 34,000 \
\text { Production in units } & 10,000
\end{array}$$

Question

Hoovern Company provided the following data for May: What is the cost of goods sold?
$$\begin{array} { l l } 
\text { Direct materials } & \$ 60,000 \
\text { Direct labour } & \$ 30,000 \
\text { Overhead } & \$ 80,000 \
\text { Beginning finished goods } & \$ 15,000 \
\text { Ending finished goods } & \$ 34,000 \
\text { Production in units } & 10,000
\end{array}$$

Quizplus · Accepted Answer

The cost of goods sold (COGS) can be calculated by adding the beginning finished goods to the total manufacturing costs and then subtracting the ending finished goods. Total manufacturing costs include direct materials, direct labor, and overhead, which sum up to $170,000 ($60,000 + $30,000 + $80,000). Adding the beginning finished goods inventory ($15,000) gives $185,000. Subtracting the ending finished goods inventory ($34,000) results in a COGS of $151,000.

Hoovern Company Provided the Following Data for May: What Is