opez Corporation incurred the following costs while manufacturing its product. M
ID: 2421478 • Letter: O
Question
opez Corporation incurred the following costs while manufacturing its product.Materials used in product $120,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 14,000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line workers 110,000 Sales commissions 35,000 Factory supplies used 23,000 Salaries paid to sales clerks 50,000
Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.
Explanation / Answer
Answer: Calculation of the cost of goods manufactured:
Calculation of the COGS:
The other items not used above are operating expenses and do not go into the calculation of either (a) or (b) .
Material used in the Product 120000 Labor costs of assembly-line workers 110000 Factory overheads: Depreciation on plant 60000 Property taxes on plant 14000 Factory supplies used 23000 Add: opening WIP 12000 Less: Closing WIP 15500 Cost of goods manufactured 323500Related Questions
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