The Zoe Corporation has the following information for the month of March. Cost of direct materials used in production 69,000 Direct labor 27,000 Factory overhead 34,000 Work in process inventory, March 1 15,000 Work in process inventory, March 31 19,500 Finished goods inventory, March 1 25,000 Finished goods inventory, March 31 23,000 a. Determine the cost of goods manufactured. b. Determine the cost of goods sold.

Instructions are listed below.

Explanation:

Giving the following information:

Cost of direct materials used in production 69,000

Direct labor 27,000

Factory overhead 34,000

Work in process inventory, March 1: 15,000

Work in process inventory, March 31: 19,500

Finished goods inventory, March 1: 25,000

Finished goods inventory, March 31: 23,000

A) To calculate the cost of goods manufactured we need to use the following formula:

cost of goods manufactured = beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured = 15,000 + 69,000 + 27,000 + 34,000 - 19,500 = $125,500

B) Now, we can calculate the cost of goods sold:

COGS = beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS = 25,000 + 125,500 - 23,000 = $127,500