Zimmer, Inc. started the month of January with beginning finished goods inventory of $20,000. The cost of goods manufactured during the month was $120,000 and the ending finished goods inventory was $50,000. What is the unadjusted cost of goods sold for January?

a.$90,000

b.$120,000

c.$140,000

d.$150,000

The correct answer is A.

Explanation:

Giving the following information:

Beginning finished goods inventory of $20,000

The cost of goods manufactured during the month was $120,000

Ending finished goods inventory was $50,000

To calculate the cost of goods sold, we need to use the following formula:

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

COGS = 20,000 + 120,000 - 50,000 = $90,000