During 2017, Matt Co. paid $19,000 for direct material, $21,000 in wages for pro

Question

During 2017, Matt Co. paid $19,000 for direct material, $21,000 in wages for production workers, and $15,000 in wages for sales personnel. Lease payments and utilities on the production facilities amounted to $9,000. General, selling, and administrative expenses were $6,000. The company owns a manufacturing equipment. The original cost of the equipment is $25,000 and has a salvage value of $5,000 after 4 years. Depreciation on sales car equals $8,000. The company produced 5,000 units and sold 3,000 units at a price of $20.00 a unit. The cost of goods sold is which of the following amounts? Hint: watch out for depreciation

Explanation / Answer

Direct material 19000 wages for production workers 21000 Lease Payment 9000 Depreciation On equipment (25000-5000)/4 5000 Total Cost of Prodction 54000 Cost Per Unit =45000/5000 10.8 Hence cost of Goods Sold 3000*10.8 32400

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