Fun-in-the-Sun Tanning Lotion Company manufactures suntan lotion made from organic materials....
Question:
Fun-in-the-Sun Tanning Lotion Company manufactures suntan lotion made from organic materials. During its first year of operations, it purchased raw materials costing $78,200, of which it used $56,300 in manufacturing suntan lotions. It incurred manufacturing labor costs of $36,100 and manufacturing overhead costs of $26,800 during the year. Inventories taken at the end of the year revealed unfinished suntan lotions costing $12,700 and finished suntan lotions costing $28,500. Compute the amount of cost of goods sold for the year.
Inventory:
In manufacturing organizations, a majority of raw material purchases are typically used to manufacture products with the remainder being stored in inventory. Ending inventory can also include manufactured goods that have not been sold at the end of an accounting period.
Answer and Explanation: 1
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View this answerThe amount of cost of goods sold for the year is $78,000.
Explanation:
The total manufacturing cost is calculated below:
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Cost of Goods Sold on an Income Statement: Definition & Formula
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Chapter 2 / Lesson 10
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Learn the definition of the cost of goods sold and the formula used to calculate it. Also, learn how the cost of goods sold is calculated using examples.
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