Question

During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000. if dolan company's cost of goods manufactured for 2013 amounted to $1,390,000, its cost of goods sold for the year is

Answer 1

Formula to calculate cost of goods sold:

Cost of goods sold = Opening stock + Cost of goods manufactured - Closing stock

Therefore, cost of goods sold for the year 2013 for Dollan Company = Finished goods stock as on Dec 31,2012 + Cost of goods manufactured for 2013 - Finished goods stock as on Dec 31, 2013:

$150,000 + $1,390,000 - $190,000 = $1,350,000

Therefore correct answer is $1,350,000