Information from the records of the Tyler Enterprises for March is as follows:
$$\begin{array} { l r }
\text { Sales } & \$ 41,000 \
\text { Direct labour } & 10,000 \
\text { Selling and administrative expenses } & 7,000 \
\text { Direct materials purchases } & 6,000 \
\text { Factory averhead } & 13,500
\end{array}$$ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\text { Inventories }$
$\begin{array}{lcc}
& \underline{\text { March 1 }}&\underline{\text { March 31}}\
\text { Direct materials } & \$ 1,200 & \$ 1,400 \
\text { Work in process } & 2,500 & 2,800 \
\text { Finished goods } & 2,300 & 1,900 \

\end{array}$
-Refer to the figure.What is the cost of goods sold?
A)$28,600
B)$29,400
C)$29,500
D)$36,500

Question

Information from the records of the Tyler Enterprises for March is as follows:
$$\begin{array} { l r } 
\text { Sales } & \$ 41,000 \
\text { Direct labour } & 10,000 \
\text { Selling and administrative expenses } & 7,000 \
\text { Direct materials purchases } & 6,000 \
\text { Factory averhead } & 13,500
\end{array}$$  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\text { Inventories }$
$\begin{array}{lcc}
& \underline{\text { March 1 }}&\underline{\text { March 31}}\
 \text { Direct materials } & \$ 1,200 & \$ 1,400 \
\text { Work in process } & 2,500 & 2,800 \
 \text { Finished goods } & 2,300 & 1,900 \

\end{array}$
-Refer to the figure.What is the cost of goods sold?
A)$28,600
B)$29,400
C)$29,500
D)$36,500

Quizplus · Accepted Answer

To calculate the cost of goods sold (COGS), we need to consider the costs associated with production, which include the cost of direct materials used, direct labor, and factory overhead. We also need to adjust for changes in inventory levels.1. **Direct Materials Used**: Start with the beginning inventory of direct materials, add the purchases, and subtract the ending inventory to find the materials used.   - Beginning inventory of direct materials: $1,200   - Plus purchases of direct materials: $6,000   - Less ending inventory of direct materials: $1,400   - Direct materials used = $1,200 + $6,000 - $1,400 = $5,8002. **Total Manufacturing Costs**: Add the direct materials used to the direct labor and factory overhead.   - Direct materials used: $5,800   - Direct labor: $10,000   - Factory overhead: $13,500   - Total manufacturing costs = $5,800 + $10,000 + $13,500 = $29,3003. **Adjust for Work in Process (WIP) Inventory**: Add the beginning WIP inventory, subtract the ending WIP inventory to find the cost of goods manufactured.   - Beginning WIP inventory: $2,500   - Ending WIP inventory: $2,800   - Adjustment = $2,500 - $2,800 = -$3004. **Cost of Goods Manufactured**: Add the total manufacturing costs to the WIP inventory adjustment.   - Total manufacturing costs: $29,300   - WIP inventory adjustment: -$300   - Cost of goods manufactured = $29,300 - $300 = $29,0005. **Cost of Goods Sold (COGS)**: Start with the cost of goods manufactured, add the beginning finished goods inventory, and subtract the ending finished goods inventory.   - Cost of goods manufactured: $29,000   - Beginning finished goods inventory: $2,300   - Ending finished goods inventory: $1,900   - COGS = $29,000 + $2,300 - $1,900 = $29,400Therefore, the correct answer is $29,400.

Information from the Records of the Tyler Enterprises for March