Coldplay Corporation incurred the following costs while manufacturing its produc
ID: 2352007 • Letter: C
Question
Coldplay Corporation incurred the following costs while manufacturing its product.Materials used in product $100,000 Advertising expense $45,000
Depreciation on plant $60,000 Property taxes on plant $14,000
Property taxes on store $7,500 Delivery expense $21,000
Labor costs of assembly-line workers 110,000 Sales commissions $35,000
Factory supplies used 23,000 Salaries paid to sales clerks $50,000
Work-in-process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $55,600 at December 31.
Instructions
(a) Compute cost of goods manufactured.
(b) Compute cost of goods sold.
Explanation / Answer
Compute cost of goods manufactured Materials used in product $100,000 Labor costs of assembly-line workers 110,000 Factory overheads ...Depreciation on plant 60,000 ...Property taxes on plant 14,000 ...Factory supplies used 23,000 Add WIP $12,000 Less: WIP $15,500 Cost of goods manufactured $303,500 (b) Compute cost of goods sold Beginning FG $60,000 Cost of goods mfd $303,500 less Ending FG $55,600 COGS $307,900