For the month of December,its first month of operations,the Radcliffe Corporation completed and transferred 800 units of product costing $80,000 to produce to Finished Goods Inventory.If Radcliffe sold 650 units during the same month,how much was cost of goods sold for the same period?
A)$80,000
B)$8,000
C)$6,500
D)$65,000

Question

Quizplus · Accepted Answer

Cost of goods sold (COGS) can be calculated as follows:

Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory = Cost of goods sold

Since Radcliffe is a new company, there is no beginning finished goods inventory, and since all 800 units produced were either sold or in finished goods inventory at the end of the month, the ending finished goods inventory is 150 units (800 - 650).

Cost of goods manufactured is the cost of the units produced, which is given as $80,000.

Therefore, COGS = $80,000 + 0 - (150 * cost per unit)

To find the cost per unit, we divide the cost of goods manufactured by the number of units produced:

$80,000 / 800 units = $100 per unit

So, COGS = $80,000 - (150 * $100) = $65,000.

Therefore, the correct answer is D, $65,000.

For the Month of December,its First Month of Operations,the Radcliffe