Figure 2-16 An appliance repair shop purchased materials costing $9,000 in May.The beginning inventory of material parts was $4,500 and the ending inventory of material parts was $4,000.Payments for direct labor for May totaled $27,000, secretarial costs were $2,000, and overhead of $5,000 was incurred.In addition, $5,000 was spent on advertising and $2,000 for the franchise name.Revenue for May was $50,000.
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Refer to Figure 2-16.What is the cost of services sold for May?

Question

Quizplus · Accepted Answer

The cost of services sold is calculated as: Beginning Inventory ($4,500) + Purchases ($9,000) - Ending Inventory ($4,000) + Direct Labor ($27,000) + Overhead ($5,000) = $41,500.

Figure 2-16 an Appliance Repair Shop Purchased Materials Costing $9,000