How to find Cost of Goods Sold with this info?
Net sales $1,801,000
Selling expenses-variable $73,000
Direct materials 433,000
Selling expenses-fixed 66,000
Direct labor 354,000
Administrative expenses-variable 22,000
Manufacturing overhead-variable 321,000
Administrative expenses-fixed 62,000
Manufacturing overhead-fixed 291,000
- 1 decade agoFavorite Answer
Well, first, you need to remember what cost of goods sold is...
It's the cost of the goods (products) that have been sold. In a manufacturing company, this includes Direct Materials, Direct Labor, and Overhead (costs incurred to help produce product, but aren't directly put into the product)
Therefore, assuming the items that you've given are those relating to only those goods that were sold, you only need to add up the direct materials, direct labor, and manufacturing overhead (both variable and fixed)..
This should give you an ending answer of $1,399,000.
If the information you gave was for the costs incurred during the period and there were still products that you didn't sell, some portion of each of those costs would not be considered COGS.
Selling Expenses and Admin Expenses aren't related to the product at all, rather to the administration of the business cycle (and selling the goods)...not producing them.