First Class, Inc., expects to sell 26,000 pool cues for $14 each. Direct materials costs are $2, direct manufacturing labor is $4, and manufacturing overhead is $0.89 per pool cue. The following inventory levels apply to 2019:

On the 2019 budgeted income statement, what amount will be reported for cost of goods sold?

Question

First Class, Inc., expects to sell 26,000 pool cues for $14 each. Direct materials costs are $2, direct manufacturing labor is $4, and manufacturing overhead is $0.89 per pool cue. The following inventory levels apply to 2019:

On the 2019 budgeted income statement, what amount will be reported for cost of goods sold?

Quizplus · Accepted Answer

The cost per unit is $6.89 ($2 + $4 + $0.89). Therefore, the total cost of goods sold is $179,140 ($6.89 × 26,000).