Question

Sales are 450,000. Beginning finished goods were 23,000. Ending finished goods are 30,000. The cost of goods sold is 300,000. What is the cost of goods manufactured?

a) 323,000

b) 307,000

c) 330,000

d) 293,000

anyone please help me to choose the correct option. need it urgently
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Answer 1

Answer:

ans is B 307000

Explanation:

because 7000 is more in closing stock which will added in total manufactured

so it becomes 307000

Answer 2

Answer:

The correct option is B i.e., Rs. 3,07,000

Explanation:

Cost of Goods Manufactured refers to the total value of manufacturing of finished goods during one accounting period or financial year.

Cost of Goods Manufactured include direct materials, direct labour, and manufacturing overhead of the products which are transferred from goods work-in-progress to the goods at final stage i.e. Finished goods.

To determine Cost of good manufactured:

Cost of Goods Manufactured = Direct Materials Cost + Direct Labor Cost + Manufacturing Overhead + Beginning WIP Inventory – Closing WIP Inventory

Another method to determine Cost of goods manufactured with the help of Cost of good sold.

Cost of Good sold (Cost of Sales) = Cost of good manufactured + Finished goods at the beginning - Finished goods at the end.

Here as per questions:

Cost of good sold = Rs. 3,00,000

Finished goods at the beginning = Rs. 23,000

Finished goods at the end = Rs. 30,000

Substitute the value in above formula

Rs. 3,00,000 = Cost of good manufactured + Rs. 23,000 - Rs. 30,000

Rs. 3,00,000 = Cost of good manufactured - Rs. 7,000

Rs. 3,00,000 + Rs. 7,000 = Cost of good manufactured

Hence the answer is Cost of good manufacture = Rs. 3,07,000

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