Q16-10SE - Horngren'S Financial And Managerial Accounting

Question

Computing cost of goods sold, manufacturing company 

Use the following information to calculate the cost of goods sold for The Ellis Company for the month of June: 

Finished Goods Inventory:

 Beginning Balance $ 30,000

Ending Balance 10,000 

Cost of Goods Manufactured 165,000

Step-by-Step Solution

Answer

The cost of goods sold is computed as $185,000

Definition of Finished goods

The finished goods are defined as goods which converted to the end product from the raw materials.

Computation of Cost of goods sold

Costs of goods solds=Begining balance+Cost of goods manufacture-Ending balance

                                   =$30,000+$1,65,000-$10,000

                                   =$1,85,000