Use the Following Information for Questions
Caltreck Manufacturing Inc

question 47

Multiple Choice

Use the following information for questions
Caltreck Manufacturing Inc.'s accounting records reflect the following inventories:
$$\begin{array} { l c c c } & \underline{ \text { Dec. 31,2019 } }& \underline{\text { Dec. 31, 2020} } \\\text { Raw materials inventory } & \$ 100,000 & \$ 80,000 \\\text { Wark in process irventory } & 130,000 & 145,000 \\\text { Finished goods irventory } & 125,000 & 115,000\end{array}$$ During 2020, Caltreck purchased $950,000 of raw materials, incurred direct labour costs of $125,000, and incurred manufacturing overhead totalling $160,000.
-Assume Caltreck Manufacturing's cost of goods manufactured for 2020 amounted to $1,200,000.How much would it report as cost of goods sold for the year?

• A)$1,210,000
• B)$1,250,000
• C)$1,325,000
• D)$1,190,000

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Definitions:

Factory Equipment

Fixed assets used in the manufacturing process, such as machinery and tools.

Factory Overhead

All indirect costs associated with manufacturing, including utilities, rent for the manufacturing space, and salaries of non-direct labor, accumulated and allocated to units produced.

Baker's Wages

Refers to the compensation paid to bakery workers for their labor, considered as direct labor costs in production.

Product Costs

All costs incurred to acquire or manufacture a product, including direct materials, direct labor, and manufacturing overhead expenses.