Erholm Inc. has provided the following data for the month of March. The balance in the Finished Goods inventory account at the beginning of the month was $43,000 and at the end of the month was $42,000. The cost of goods manufactured for the month was $221,000. The actual manufacturing overhead cost incurred was $45,000 and the manufacturing overhead cost applied to Work in Process was $49,000. The adjusted cost of goods sold that would appear on the income statement for March is:

Question

Quizplus · Accepted Answer

The adjusted cost of goods sold (COGS) can be calculated as:

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

= $43,000 + $221,000 - $42,000

= $222,000 - $42,000

= $218,000

Therefore, the answer is (A) $218,000.