In its first year of operations,a company has sales of $100,000,ending finished goods inventory of $9,000,variable manufacturing costs of $50,000,and fixed manufacturing costs of $28,000 for the year.Assuming the company uses direct costing,the cost of goods sold for the year is
A) $22,000.
B) $41,000.
C) $59,000.
D) $13,000.

Question

Quizplus · Accepted Answer

Using direct costing, the cost of goods sold is calculated by adding variable manufacturing costs to the beginning finished goods inventory and subtracting the ending finished goods inventory. 
Cost of Goods Sold = (Beginning Finished Goods Inventory + Variable Manufacturing Costs) - Ending Finished Goods Inventory 
= ($0 + $50,000) - $9,000 
= $41,000

In Its First Year of Operations,a Company Has Sales of $100,000,ending