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21 January, 17:11

Myles Manufacturing Company's accounting records reflect the following inventories: Dec. 31, 2014 Dec. 31, 2013 Raw materials inventory $620,000 $820,000 Work in process inventory 300,000 220,000 Finished goods inventory 380,000 100,000 During 2014, $900,000 of raw materials were purchased, direct labor costs amounted to $1,000,000, indirect labor costs amounted to $300,000, and manufacturing overhead was $960,000. Based upon the above information, cost of goods sold for the year is: Select one: a. $2,400,000. b. $2,380,000. c. $2,480,000. d. $2,700,000. e. $2,100,000.

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  1. 21 January, 20:22
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    Myles Manufacturing Company

    Cost of Goods Sold = $2,700,000

    Explanation:

    Cost of Goods Sold:

    Beginning Inventory of Raw Materials = $820,000

    Purchase of Materials = $900,000

    Less closing inventory of Raw Materials = $620,000

    Cost of Raw Materials used in production = $1,100,000

    Opening WIP = $220,000

    Cost of Raw Materials used in production = $1,100,000

    Direct Labour = $1,000,000

    Manufacturing Overhead = $960,000

    Less Closing WIP = $300,000

    Cost of Goods Manufactured = $2,980,000

    Opening Finished Goods = $100,000

    Cost of Goods Manufactured = $2,980,000

    Less closing Finished Goods = $380,000

    Cost of Goods Sold = $2,700,000
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