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

Question

Guest

Business

6 July, 03:03

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

+4

Answers (1)

Know the Answer?

Walter Leonard · Answer 1

Cost of Goods Manufactured = 120,000+110,000 + (23,000+14,000+60,000) + 12,000-15,500 = $323,500

Cost of Goods Sold = 60,000 + 323,500 - 45,600

Explanation:

Lopez 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.

Compute cost of goods manufactured.

Cost of goods Sold

1. Cost of goods manufactured.

COGM = Direct Material + Direct Labor + Manufacturing Overhead + Beginning Work In process - Ending Work in process.

COGM = 120,000+110,000 + (23,000+14,000+60,000) + 12,000-15,500 = $323,500

2. Cost of Goods Sold

COGS = Beginning Inventory of Finished Goods + Cost of Goods Manufactured - Ending Inventory of Finished Goods

COGS = 60,000 + 323,500 - 45,600