Question

Question 1 (7 points)

Baltimore Manufacturing Company just completed its year ended December 31, 2019. Depreciation for the year amounted to $130,000: 20% relates to sales, 20% relates to administrative facilities, and the remainder relates to the factory. Of the total units produced during FY 2019: 65% were sold in 2019 and the rest remained in finished good inventory. Use this information to determine the dollar amount of the total depreciation that will be contained in Cost of Goods Sold.  (Round dollar values & enter as whole dollars only.)

Your Answer:

Question 1 options:

Answer

Answer 1

Depreciation for the year amounted = $130,000

Depreciation related to sales = 20%

Depreciation related to administrative facilities = 20%

Depreciation related to factory = 60%

= Depreciation for the year x 60%

= 130,000 x 60%

= $78,000

Of the total units produced during FY 2019: 65% were sold in 2019 and the rest remained in finished good inventory.

Dollar amount of the total depreciation that will be contained in Cost of Goods Sold = Depreciation related to factory x Percentage of goods sold

= 78,000 x 65%

= $50,700

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