Question

haver corporation has provided the following data concerning last months operations.

purchases of raw materials: $32,000
indirect materials included in manufacturing overhead: $4,000
direct labor cost: $58,000
manufacturing overhead applied to work in process: $84,000

beginning inventory:
raw materials inventory: $10,000
work in process inventory: $58,000
finished goods inventory: $32,000

ending inventory:
raw materials inventory: $16,000
work in process inventory: $74,000
finished goods inventory: $49,000

how much is the cost of goods available for sale on the schedule of cost of goods sold?

multiple choice
( ) $134,000
( ) $180,000
( ) $131,000
( ) $148,000

Explanation:

Calculate raw materials used in production

Using the Cost of Goods Manufactured knowledge point, we first determine the direct materials used.

$$
LATEXBLOCK0
$$

Calculate total manufacturing costs

We sum the direct materials, direct labor, and applied manufacturing overhead.

$$
LATEXBLOCK1
$$

Calculate cost of goods manufactured

We adjust the total manufacturing costs by the change in work in process inventory.

$$
LATEXBLOCK2
$$

Calculate cost of goods available for sale

Using the Schedule of Cost of Goods Sold knowledge point, we add the beginning finished goods inventory to the cost of goods manufactured.

$$
LATEXBLOCK3
$$

Answer:

• (A) $134,000
• (B) $180,000 (Correct answer)
• (C) $131,000
• (D) $148,000