Question

Jotter Brothers' controller was in an accident and took sudden medical leave. They have asked you to find the ending balances for the inventory footnote. Direct materials used, $140,000 Work in process, beginning, $35,000 Finished goods, beginning, $160,000 Direct labor and overhead, $330,000 Gross margin percent, 70% Sales revenue, $610,000 Cost per unit, 8.30 Units produced, 25,000 What is ending Finished Goods for the period? Enter your response without dollars sign or commas, rounded to the nearest whole number. Your Answer: Answer

Answer 1

Ans.	Particulars	Amount
	Cost of goods manufactured	$207,500
	Add: Beginning finished goods inventory	$160,000
	Less: Cost of goods sold	-$183,000
	Ending finished goods inventory	$184,500
	*Sum of cost of goods manufactured and beginning finished goods inventory is known as cost of goods
	available for sale and the difference between cost of goods available for sale and cost of goods sold is
	known as ending finished goods inventory.
	*Calculations of cost of goods manufactured:
	Cost of goods manufactured = Units produced * Cost per unit
	25,000 * $8.30        =	$207,500
	*Calculations of cost of goods sold:
	Gross profit = Sales * Gross profit ratio
	$610,000 * 70%
	$427,000
	Cost of goods sold =   Sales - Gross profit
	$610,000 - $427,000
	$183,000