ComPrint Co. had the following beginning and ending inventory balances for the year ended December 31:$$\begin{array} { l c c }
& \text { January 1 } & \text { December } 31 \
\text { Materials } & \$ 10,000 & \$ 8,000 \
\text { Work in Process } & \$ 18,000 & \$ 17,000 \
\text { Finished Goods } & \$ 21,000 & \$ 16,500
\end{array}$$
In addition, direct labour costs of $30,000 were incurred, overhead equalled $42,000, materials purchased were $27,000, and selling and administrative costs were $22,000. ComPrint Co. sold 25,000 units of product during the year at a sales price of $5.00 per unit.

-Refer to the Figure.What was the amount of cost of goods sold for the year?
A)$97,500
B)$102,000
C)$106,500
D)$128,500

Question

ComPrint Co. had the following beginning and ending inventory balances for the year ended December 31:$$\begin{array} { l c c } 
& \text { January 1 } & \text { December } 31 \
\text { Materials } & \$ 10,000 & \$ 8,000 \
\text { Work in Process } & \$ 18,000 & \$ 17,000 \
\text { Finished Goods } & \$ 21,000 & \$ 16,500
\end{array}$$
In addition, direct labour costs of $30,000 were incurred, overhead equalled $42,000, materials purchased were $27,000, and selling and administrative costs were $22,000. ComPrint Co. sold 25,000 units of product during the year at a sales price of $5.00 per unit.
 
-Refer to the Figure.What was the amount of cost of goods sold for the year?
A)$97,500
B)$102,000
C)$106,500
D)$128,500

Quizplus · Accepted Answer

Cost of Goods Sold (COGS) is calculated as follows: 1. Beginning Inventory (Materials) + Purchases - Ending Inventory (Materials) = Cost of Materials Used$$ \$10,000 + \$27,000 - \$8,000 = \$29,000 $$2. Cost of Materials Used + Direct Labor + Overhead = Total Manufacturing Costs$$ \$29,000 + \$30,000 + \$42,000 = \$101,000 $$3. Total Manufacturing Costs + Beginning Inventory (Work in Process) - Ending Inventory (Work in Process) = Cost of Goods Manufactured$$ \$101,000 + \$18,000 - \$17,000 = \$102,000 $$4. Cost of Goods Manufactured + Beginning Inventory (Finished Goods) - Ending Inventory (Finished Goods) = Cost of Goods Sold$$ \$102,000 + \$21,000 - \$16,500 = \$106,500 $$

ComPrint Co In Addition, Direct Labour Costs of $30,000 Were Incurred, Overhead