beginning finished goods inventory is 90000 ending finished goods inventory is 63000 sales is 412000 gross margin is 62000. what is cost of goods manufactured?

Question

 need urgent help

Answer 1

Cost of goods manufactured, using cost of goods sold.

 

Cost of goods sold= Beginning Inventory+cost of goods manufactured-Ending Inventory.

 

Here we have two unknown quantities i.e cost of goods sold and cost of goods manufactured. 

 

Step 1- Compute Cost of goods sold (COGS)

 

COGS= Sales- Gross Margin= 412000-62000=$350,000

 

Step 2- Compute Cost of Goods Manufactured using formula above

Cost of goods sold= Beginning Inventory+cost of goods manufactured-Ending Inventory.

350,000=90,000+Cost of goods manufactured- 63000

So, Cost of goods manufactured= 350,000+63000-90,000= $323,000

 

 

 

Cost of goods sold= Beginning Inventory+cost of goods manufactured-Ending Inventory.