The following information was extracted from the accounting records of Lowe Company: $$\begin{array} { l r }
\text { Direct materials purchased } & \$ 80,000 \
\text { Direct material s used } & 76,000 \
\text { Direct manufacturing labor costs } & 10,000 \
\text { Indirect manufacturing labor costs } & 12,000 \
\text { Sales sal aries } & 14,000 \
\text { Other factory expenses } & 22,000 \
\text { Selling and administrative expenses } & 20,000
\end{array}$$ The finished goods inventory was $0 at the beginning of the period and $30,000 at the end of the period.The cost of goods sold is _____.
A)$90,000
B)$113,000
C)$139,000
D)$147,000

Question

The following information was extracted from the accounting records of Lowe Company: $$\begin{array} { l r } 
\text { Direct materials purchased } & \$ 80,000 \
\text { Direct material s used } & 76,000 \
\text { Direct manufacturing labor costs } & 10,000 \
\text { Indirect manufacturing labor costs } & 12,000 \
\text { Sales sal aries } & 14,000 \
\text { Other factory expenses } & 22,000 \
\text { Selling and administrative expenses } & 20,000
\end{array}$$ The finished goods inventory was $0 at the beginning of the period and $30,000 at the end of the period.The cost of goods sold is _____.
A)$90,000
B)$113,000
C)$139,000
D)$147,000

Quizplus · Accepted Answer

The cost of goods sold (COGS) can be calculated by adding all the manufacturing costs together and then subtracting the ending finished goods inventory. Manufacturing costs include direct materials used ($76,000), direct manufacturing labor costs ($10,000), indirect manufacturing labor costs ($12,000), and other factory expenses ($22,000), totaling $120,000. Subtracting the ending finished goods inventory ($30,000) from this total gives a COGS of $90,000.

The Following Information Was Extracted from the Accounting Records of Lowe