At the beginning of 2015, Conway Manufacturing had the following account balances: Following additional details are provided for the year: After recording all these transactions and adjusting for the over/underallocated overhead, the ending balance in the Cost of Goods Sold account is a:

Question

At the beginning of 2015, Conway Manufacturing had the following account balances:  Following additional details are provided for the year:  After recording all these transactions and adjusting for the over/underallocated overhead, the ending balance in the Cost of Goods Sold account is a:

Quizplus · Accepted Answer

To calculate the ending balance in the Cost of Goods Sold (COGS) account, we need to calculate the total cost of goods manufactured and subtract the cost of goods sold.

Total cost of goods manufactured = Direct Materials + Direct Labor + Manufacturing Overhead + Beginning Work in Process Inventory - Ending Work in Process Inventory
= $1,200,000 + $525,000 + $330,000 + $172,000 - $140,000
= $2,087,000

Cost of Goods Sold = Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory
= $240,000 + $2,087,000 - $205,000
= $2,122,000

Therefore, the ending balance in the COGS account is a debit of $445,000 (Option B).

At the Beginning of 2015, Conway Manufacturing Had the Following