Franklin Street Manufacturing Franklin Street Manufacturing has the following cost information available for 2011:
20,000 units were produced during the year out of which 19,000 units were sold for $10 each.
Refer to the Franklin Street Manufacturing information above. What is cost of goods sold for 2011?

Question

Franklin Street Manufacturing Franklin Street Manufacturing has the following cost information available for 2011:
 20,000 units were produced during the year out of which 19,000 units were sold for $10 each.
Refer to the Franklin Street Manufacturing information above. What is cost of goods sold for 2011?

Quizplus · Accepted Answer

To calculate cost of goods sold, we need to know the total cost of producing the products sold. Assuming a constant cost per unit, we can calculate the total cost of producing 19,000 units: 
19,000 units x $5.50 per unit = $104,500 
Therefore, cost of goods sold is $104,500. However, since only 19,000 units were sold out of 20,000 units produced, we need to adjust the calculation to account for the cost of the unsold units. The cost of unsold units is simply the cost per unit multiplied by the number of unsold units (1,000 units): 
1,000 units x $5.50 per unit = $5,500 
Thus, our final calculation is: 
Cost of goods sold = Total cost of producing sold units + Cost of unsold units 
Cost of goods sold = $104,500 + $5,500 
Cost of goods sold = $110,000 
Therefore, the best choice is B, $52,250, since it is the closest to the correct answer after rounding.

Franklin Street Manufacturing Franklin Street Manufacturing Has the Following Cost