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24 August, 10:32

Kushman Combines Inc. has $20,000 of ending finished goods inventory as of December 31, 2017. If beginning finished goods inventory was $10,000 and cost of goods sold was $50,000, how much would Kushman report for cost of goods manufactured?

(A) $60,000

(B) $40,000

(C) $10,000

(D) $70,000

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Answers (1)
  1. 24 August, 10:46
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    The correct answer is A.

    Explanation:

    Giving the following information:

    Kushman Combines Inc. has $20,000 of ending finished goods inventory as of December 31, 2017. If beginning finished goods inventory was $10,000 and the cost of goods sold was $50,000.

    We need to use the following formula:

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

    50,000 = 10,000 + cost of goods manufactured - 20,000

    50,000 + 20,000 - 10,000 = cost of goods manufactured

    60,000 = cost of goods manufactured
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