Figure 5-4. Hill Company uses job-order costing.At the end of the month,the following data was gathered:
Hill's selling price is cost plus 50% for each of its products.
Refer to Figure 5-4.What is Cost of Goods Sold for the month?

Question

Figure 5-4. Hill Company uses job-order costing.At the end of the month,the following data was gathered:
 Hill's selling price is cost plus 50% for each of its products.
Refer to Figure 5-4.What is Cost of Goods Sold for the month?

Quizplus · Accepted Answer

Cost of Goods Sold can be calculated as follows:
Total Manufacturing Costs for the month = Direct Materials + Direct Labor + Manufacturing Overhead
= $685 + $305 + $280
= $1,270

Total Cost of Goods Manufactured = Total Manufacturing Costs + Beginning Work in Process Inventory - Ending Work in Process Inventory
= $1,270 + $180 - $200
= $1,250

Cost of Goods Sold = Total Cost of Goods Manufactured * (1 + Markup Percentage)
= $1,250 * 1.5
= $1,875

Therefore, the Cost of Goods Sold for the month is $1,733 (closest option is C).