Question

Kushman Combines Inc. has $20,000 of ending finished goods inventory as of December 31, 2017. If beginning finished goods inventory was $10,000 and cost of goods sold was $50,000, how much would Kushman report for cost of goods manufactured?
(A) $60,000
(B) $40,000
(C) $10,000
(D)$70,000

Answer 1

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Kushman Combines Inc. has $20,000 of ending finished goods inventory as of December 31, 2017. If beginning finished goods inventory was $10,000 and the cost of goods sold was $50,000.

We need to use the following formula:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

50,000= 10,000 + cost of goods manufactured - 20,000

50,000 + 20,000 - 10,000= cost of goods manufactured

60,000= cost of goods manufactured