During its first year of operations, Silverman Company paid $13,840 for direct materials and $10,100 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,100 while general, selling, and administrative expenses totaled $4,600. The company produced 5,900 units and sold 3,600 units at a price of $8.10 a unit. What is Silverman's cost of goods sold for the year?
A) $20,160
B) $33,040
C) $28,540
D) $17,414

Question

Quizplus · Accepted Answer

Cost of goods sold (COGS) includes direct materials and production workers' wages. COGS = (Direct Materials + Production Workers' Wages) / Total Units Produced * Units Sold = ($13,840 + $10,100) / 5,900 * 3,600 = $20,160.

During Its First Year of Operations, Silverman Company Paid $13,840