Youngstown Rubber reports the following data for its first year of operation:Direct materials used $710,000cost of goods manufactured455,000finished goods inventory (ending) 190,000manufacturing overhead100,000finished goods inventory beginning 0work in process inventory beginning 0work in process inventory, ending 130,000What is the cost of goods sold? (a) $1,265,000 (b) $455,000 (c) $395,000 (d) $265,000

The correct answer is: D = $265,000

Explanation:

Giving the following information:

Direct materials used $710,000

Cost of goods manufactured $455,000

Finished goods inventory (ending) 190,000

Manufacturing overhead100,000

Finished goods inventory beginning 0

Work in process inventory beginning 0

Work in process inventory, ending 130,000

First, we need to calculate the cost of goods manufactured during the period:

Cost of manufactured period = $455000

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

COGS=Beginning Inventory+Production during period-Ending Inventory

COGS = 0 + 455000 - 190000 = $265000