2. During its first year of operations, Silverman Company paid $8,065 for direct materials and $9,600 for production workers'wages. Lease payments and utilities on the production facilities amounted to $8,600 while general, selling, and administrative expenses totaled $4,100. The company produced 5,150 units and sold 3,100 units at a price of $7.60 a unit. What is Silverman's cost of goods sold for the year?

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2. During its first year of operations, Silverman Company paid $8,065 for direct materials and $9,600 for production workers'wages. Lease payments and utilities on the production facilities amounted to $8,600 while general, selling, and administrative expenses totaled $4,100. The company produced 5,150 units and sold 3,100 units at a price of $7.60 a unit. What is Silverman's cost of goods sold for the year?

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Answers (1)

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Casey Hunt · Answer 1

COGS = $15,810

Explanation:

Giving the following information:

During its first year of operations:

Direct material = $8,065

Direct labor = $9,600

Lease payments and utilities on the production facilities = $8,600 General, selling, and administrative expenses = $4,100.

The company produced 5,150 units and sold 3,100 units.

Price of $7.60 a unit.

COGS = beginning finished inventory + cost of goods manufactured - ending finished inventory

cost of goods manufactured = direct materials + direct labor + manufacturing overhead = 8065 + 9600 + 8600 = $26,265

Variable costs = 26265/5150 = $5.1

beginning finished inventory = 0

ending finished inventory = 5150-3100 = (2050 units*$5.1) = 10455

COGS = 0 + 26265 - 10455 = $15,810