The Lyons Company's cost of goods manufactured was $120,000 when its sales were $360,000 and its gross margin was $220,000. If the ending inventory of finished goods was $30,000, the beginning inventory of finished goods must have been:

Question

Quizplus · Accepted Answer

The cost of goods sold can be calculated as follows:

Cost of Goods Sold = Cost of Goods Manufactured + Beginning Inventory of Finished Goods - Ending Inventory of Finished Goods

$220,000 = $120,000 + Beginning Inventory of Finished Goods - $30,000

Solving for Beginning Inventory of Finished Goods, we get:

Beginning Inventory of Finished Goods = $130,000

Therefore, the answer is choice C, $50,000.

The Lyons Company's Cost of Goods Manufactured Was $120,000 When