Question

Knot Co. has the following activity for their most recent year when 7.000 units were made: Raw Materials: Beginning 40,000.00 Ending 19,000.00 Work in Process: Beginning 90,000.00 Ending 70,000.00 Finished Goods Inventory: Beginning 26,100.00 Ending 52,200.00 Depreciation, building & equipment Raw material purchases 20,000.00 210,000.00 15,000.00 Insurance on plant Sales salaries Repairs & Maintenance, plant Indirect 40,000.00 10,000.00 66,000.00 200,000.00 Administrative expenses 100,000.00 What is the cost of Goods Sold? Respond without commas or dollar signs, rounded to whole numbers Answer:

Answer 1

Answer: $535,900 -->Refer working note 1

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Working note 1 - Calculation of Cost of Goods Sold
Beginning finished goods inventory	$26,100
Add: Cost of goods manufactured         [Refer working note 2]	$562,000
Finished Goods available for sale	$588,100
Less: Ending finished goods inventory	$52,200
Cost of Goods Sold	$535,900

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Working note 2 - Calculation of Cost of Goods Manufactured
Direct materials:
Beginning materials inventory	$40,000
Add: Raw materials purchases	$210,000
Raw materials available for use	$250,000
Less: Ending raw materials inventory	$19,000
Raw materials used in production		$231,000
Direct labor		$200,000
Manufacturing overhead / Factory overhead:
Depreciation on Bulding & Equipment	$20,000
Insurance on Plant	$15,000
Repairs & Maintenance - Plant	$10,000
Indirect labor	$66,000
Total factory overhead		$111,000
Total manufacturing costs        [$231,000 + $200,000 + $111,000]		$542,000
Add: Beginning work in process inventory		$90,000
Total cost of work-in process		$632,000
Less: Ending work in process inventory		$70,000
Cost of goods manufactured		$562,000