Using the absorption method,the cost of goods sold is:
A) $550,000
B) $540,000
C) $480,000
D) $450,000

Question

Using the absorption method,the cost of goods sold is:
A) $550,000 
B) $540,000 
C) $480,000 
D) $450,000

Quizplus · Accepted Answer

The absorption method includes all production costs, including direct materials, direct labor, and overhead, in the cost of goods sold. From the given information, we know that total production costs were $540,000 and there were no beginning or ending inventories. Therefore, the cost of goods sold would also be $540,000.

Using the Absorption Method,the Cost of Goods Sold Is