Question

Compute cost of goods sold for 2017 using the following information.

Finished goods inventory, Dec. 31, 2016 . . . . . . . . . . . . . . . . . $345,000

Work in process inventory, Dec. 31, 2016 . . . . . . . . . . . . . . . . 83,500

Work in process inventory, Dec. 31, 2017 . . . . . . . . . . . . . . . . 72,300

Cost of goods manufactured, 2017 . . . . . . . . . . . . . . . . . . . . . . 918,700

Finished goods inventory, Dec. 31, 2017 . . . . . . . . . . . . . . . . . 283,600

Short answer

The cost of goods sold equals $980,100.

Step-by-step solution

Explanation on the cost of goods sold

The cost of goods sold indicates the total value of the sold product. It includes direct material, direct labor and manufacturing overhead incurred on the sold product.

Calculation of cost of goods sold

Particulars	Amount
Finished goods inventory, beginning	$345,000
Cost of goods manufactured	918,700
Cost of goods available for sale	$1,263,700
Finished goods inventory, ending .	(283,600)
Cost of goods sold	$980,100