Rayfield Company's management accountant collected the following inventory and transaction data for the month: Inventories Ending Beginning
Direct materials $220 $190
Work in process 160 140
Finished goods 190 220
The cost of goods available for sale was $1,370. Total manufacturing costs assigned to work in process during the month was $1,170. Manufacturing overhead was $334; and direct materials used were $386.
Cost of goods sold for the month was:

Question

Quizplus · Accepted Answer

The cost of goods sold can be calculated as follows:
Cost of Goods Sold = Cost of Goods Available for Sale - Ending Inventory
Cost of Goods Available for Sale = Beginning Inventory + Cost of Goods Purchased
Cost of Goods Purchased = Direct Materials Used + Direct Labor + Manufacturing Overhead
Cost of Goods Purchased = $386 + Total Manufacturing Costs Assigned to WIP + Manufacturing Overhead
Cost of Goods Purchased = $386 + $1,170 + $334 = $1,890
Cost of Goods Available for Sale = $190 + $140 + $220 + $1,890 = $2,440
Ending Inventory = $220 + $160 + $190 = $570
Cost of Goods Sold = $2,440 - $570 = $1,870
Therefore, the cost of goods sold for the month was $1,180 (Choice C).

Rayfield Company's Management Accountant Collected the Following Inventory and Transaction