Perry Company. Perry Company manufactures wood file cabinets.The following information is available for June of the current year.
The direct labor rate is $9.60 per hour and overhead for the month was $9,600.
Refer to Perry Company.If there were 1,500 direct labor hours and $21,000 of raw material purchased,how much is Cost of Goods Sold?

Question

Perry Company. Perry Company manufactures wood file cabinets.The following information is available for June of the current year.
 The direct labor rate is $9.60 per hour and overhead for the month was $9,600.
Refer to Perry Company.If there were 1,500 direct labor hours and $21,000 of raw material purchased,how much is Cost of Goods Sold?

Quizplus · Accepted Answer

To calculate Cost of Goods Sold, we need to first calculate the total manufacturing cost. Using the given information, we can calculate the total manufacturing cost as:
Direct Labor Cost = Direct Labor Hours x Direct Labor Rate = 1,500 x $9.60 = $14,400
Manufacturing Overhead = $9,600
Raw Material Cost = $21,000

Total Manufacturing Cost = Direct Labor Cost + Manufacturing Overhead + Raw Material Cost
= $14,400 + $9,600 + $21,000 = $45,000

Now, to calculate Cost of Goods Sold, we need to subtract the ending inventory from the total manufacturing cost. If there is no information given about the ending inventory, we can assume it to be zero.

Therefore, Cost of Goods Sold = Total Manufacturing Cost – Ending Inventory
= $45,000 – $0 = $45,000

Hence, the correct answer is option D, $53,800.