The gross margin for Cushing Company for the first quarter of last year was $325,000 when sales were $700,000.The beginning inventory of finished goods was $60,000,and the ending inventory of finished goods was $85,000.What was the cost of goods manufactured for the first quarter?
A) $375,000.
B) $350,000.
C) $400,000.
D) $385,000.= (700,000 - 325,000)+ 85,000 - 60,000 = $400,000.

Question

Quizplus · Accepted Answer

The cost of goods manufactured is calculated by taking the cost of goods sold (sales minus gross margin) and adding the change in finished goods inventory. Using the given information, the cost of goods sold can be calculated as $700,000 - $325,000 = $375,000. Adding the change in finished goods inventory ($85,000 - $60,000 = $25,000) gives a cost of goods manufactured of $375,000 + $25,000 = $400,000. Therefore, option C is the correct answer.

The Gross Margin for Cushing Company for the First Quarter