In its first year of operation, the Excellent Publishing Company sells 52,000 units and has 1,700 units in stock at year end. The cost of goods sold are $3,100,000. What are the total manufacturing costs for the year if the average unit cost is $8.50

Question

Lesly Cain

Business

2 April, 13:39

In its first year of operation, the Excellent Publishing Company sells 52,000 units and has 1,700 units in stock at year end. The cost of goods sold are $3,100,000. What are the total manufacturing costs for the year if the average unit cost is $8.50

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Answers (1)

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Allyson Walker · Answer 1

The answer is $3,114,450

Explanation:

Total manufacturing cost is the cost of all inputs (labour cost, material cost, overhead cost etc.) directly or indirectly used in the production of a good.

In this question, the manufacturing cost will be cost of goods sold plus the cost of ending or remaining inventory.

Cost of goods sold is $3,100,000

Ending or remaining inventory is:

1,700 units x $8.5 = $14,450

Therefore, total manufacturing cost is $3,100,000 + $14,450

=$3,114,450