Figure 5 - 6 In the Monroe Company, the following Job cards were totaled at the end of the month:
Job 243 $5,750
Job 244 $4,980
Job 245 $3,675
Job 246 $4,250
Job 247 $5,100
Job 248 $3,800
Jobs 243 and 244 were in Finished Goods Inventory at the beginning of the month. Jobs 245 and 246 were in Work-in-process at the beginning of the month. Jobs 247 and 248 were started during the month. At the end of the month, Jobs 243 and 247 were sent to customers; jobs 245, 247, and 248 were completed and sent to finished goods.
Refer to Figure 5-6. What is the cost of goods sold for the month?

Question

Quizplus · Accepted Answer

To calculate cost of goods sold, we need to add up the costs of the jobs that were completed and sold during the month. Jobs 243 and 247 were shipped to customers, so their costs are included in COGS. Jobs 245, 246, and 248 were completed during the month and sent to finished goods, so their costs are also included in COGS.

COGS = Cost of job 243 + Cost of job 247 + Cost of job 245 + Cost of job 246 + Cost of job 248
COGS = $5,750 + $5,100 + $3,675 + $4,250 + $3,800
COGS = $22,575

However, we need to subtract the cost of jobs 243 and 244 that were in Finished Goods Inventory at the beginning of the month and were not sold during the month.

COGS = $22,575 - ($5,750 + $4,980)
COGS = $11,845

Therefore, the cost of goods sold for the month is $10,850 (option B).

Figure 5 - 6 in the Monroe Company, the Following