information for the year ended December 31, 2010: Direct labor $16,840 Direct ma

ID: 2506508 • Letter: I

Question

information for the year ended December 31, 2010:

Direct labor $16,840

Direct material used 16,300

General and administrative expenses 14,240

Indirect production costs 16,780

Selling expenses 13,599

Work in process inventory, January 1, 2010 0

Work in process inventory, December 31, 2010 0 F

inished goods inventory, January 1, 2010 0

Finished goods inventory, December 31, 2010 ?

Cost of goods sold 42,720

Requirements:

A) What is the Cost of Goods Manufactured for the year ended December 31, 2010?

B) What is Finished Goods Inventory at December 31, 2010?

Hi,

Please find the answer as follows:

Part A: Cost of Goods Manufactured

Answer is 49920

Part B: Closing Finished Goods Inventory

Cost of Goods Sold = Cost of Goods Manufactured + Opening Finished Goods - Closing Finished Goods

42720 = 49920 + 0 - Closing Finished Goods

Closing Finished Goods = 49920 - 42720 = 7200

Answer is 7200

Notes:

1) Cost of Goods Manufactured is same as Total Manufacturing Costs because there is no Opening and Closing WIP.

2) General and Administrative Expenses is not of any relevance in this question.

Thanks.

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