Watson Specialties bought $100,000 of raw materials during June, incurred $90,000 in direct labor cost, and applied $130,000 in manufacturing overhead. Inventories for June were as follows: $\begin{array}{lll}&\text { Beginning }&\text { Ending }\
\text { Raw material } & \$ 22,000 & \$ 24,000 \
\text { Work in Frocess } & \$ 23,000 & \$ 19,000 \
\text { Finished Goods } & \$ 32,000 & \$ 31,000
\end{array}$ How much is cost of goods sold for June?

Question

Quizplus · Accepted Answer

The cost of goods sold is calculated as follows:  1. Calculate the cost of raw materials used:     Beginning Raw Materials + Purchases - Ending Raw Materials = $22,000 + $100,000 - $24,000 = $98,000  2. Calculate the total manufacturing costs:     Raw Materials Used + Direct Labor + Manufacturing Overhead = $98,000 + $90,000 + $130,000 = $318,000  3. Calculate the cost of goods manufactured:     Total Manufacturing Costs + Beginning Work in Process - Ending Work in Process = $318,000 + $23,000 - $19,000 = $322,000  4. Calculate the cost of goods sold:     Cost of Goods Manufactured + Beginning Finished Goods - Ending Finished Goods = $322,000 + $32,000 - $31,000 = $323,000

Watson Specialties Bought $100,000 of Raw Materials During June, Incurred