With the following information, how do I calculate sales? Direct Materials Used

Question

With the following information, how do I calculate sales?

Direct Materials Used $ 6,000
Direct Labor 8,000
Manufacturing Overhead 4,000
Total Manufacturing Costs 18,000
Beginning Work in Process Inventory 7,000
Ending Work in Process Inventory 3,000
Sales Discounts 1,400
Cost of Goods Manufactured 22,000
Beginning Finished Goods Inventory 3,300
Goods Available for Sale 25,300
Cost of Goods Sold 22,800
Ending Finished Goods Inventory 2,500
Gross Profit 7,000
Operating Expenses 2,000
Net Income 5,000

Explanation / Answer

Add cogs to gross profit and then add sales discounts for gross sales: 22,8000 + 7,000 + 1,400 = 31,200 So Gross sales = 31,200. If you want net sales, they equal 31,200 - 1,400 = 29,800 Gross sales = 31,200. Net sales = 29,800

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