### Understanding Cost of Goods Sold (COGS) Calculation#### Question Analysis---**Question: A manufacturing company has a beginning finished goods inventory of $28,600, raw material purchases of $39,000, cost of goods manufactured of $81,500, and an ending finished goods inventory of $45,800. The cost of goods sold for this company is:**#### Options:- \$56,200- \$64,300- \$81,500- \$110,100- \$74,700**Solution:**To determine the cost of goods sold (COGS), you can use the following formula:\[ \text{COGS} = \text{Beginning Finished Goods Inventory} + \text{Cost of Goods Manufactured} - \text{Ending Finished Goods Inventory} \]Based on the given values:- Beginning Finished Goods Inventory = \$28,600- Cost of Goods Manufactured = \$81,500- Ending Finished Goods Inventory = \$45,800Substituting the values into the formula:\[ \text{COGS} = \$28,600 + \$81,500 - \$45,800 \]\[ \text{COGS} = \$109,100 - \$45,800 \]\[ \text{COGS} = \$63,300 \]So, the correct answer should be \$64,300. However, this option does not appear directly among the given ones. ---**Question 5:****The beginning and ending finished goods inventories of the Prize Ring manufacturing company were \$92,000 and \$85,750 respectively. If the cost of goods sold equaled \$74,200, what is the amount of cost of goods manufactured for this period?****Solution:**To find the cost of goods manufactured,\[ \text{Cost of Goods Manufactured} = \text{COGS} + \text{Ending Finished Goods Inventory} - \text{Beginning Finished Goods Inventory} \]Given:- Beginning Finished Goods Inventory = \$92,000- Cost of Goods Sold (COGS) = \$74,200- Ending Finished Goods Inventory = \$85,750Substituting the given values:\[ \text{Cost of Goods Manufactured} = \$74,200 + \$85,750 - \$92,000 \]\[ \text{Cost of Goods Manufactured} = \$159,950 - \$92,000 \]

Cost of goods sold represents the cost of those goods that are sold by the entity. These are…

A manufacturing company has a beginning finished goods inventory of $28,600, raw material purchases of $39,000, cost of goods manufactured of $81,500, and an ending finished goods inventory of $45,800. The cost of goods sold for this company is: O $56,200 O $64,300 O $81,500 O $110,100 O $74,700

A manufacturing company has a beginning finished goods inventory of $28,600, raw material purchases of $39,000, cost of goods manufactured of $81,500, and an ending finished goods inventory of $45,800. The cost of goods sold for this company is: O $56,200 O $64,300 O $81,500 O $110,100 O $74,700

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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