Use the Following Information to Compute the Cost of Goods

question 185

Multiple Choice

Use the following information to compute the cost of goods manufactured:
$\begin{array}{lr}\text { Beginning finished goods inventory } & \$ 65,000 \\\text { Beginning goods in process inventory } & 81,000 \\\text { Beginning raw materials } & 73,000 \\\text { Depreciation on factory equipment } & 7,000 \\\text { Direct labor } & 25,000 \\\text { Ending finished goods inventory } & 67,000 \\\text { Ending goods in process inventory } & 79,000 \\\text { Ending raw materials } & 60,000 \\\text { Factory repairs and maintenance } & 12,000 \\\text { Raw material purchases } & 50,000\end{array}$

• A) $63,000
• B) $105,000
• C) $107,000
• D) $90,000
• E) $109,000

---

Definitions:

Equivalent Units

A concept in cost accounting used to convert partially completed units into an equivalent number of fully completed units during a specific period for costing purposes.

Conversion Costs

The sum of labor and overhead costs that are necessary to convert raw materials into finished goods.

Weighted Average Method

A cost accounting method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale.

Lotions and Cosmetic Manufacturer

A type of business that specializes in producing health and beauty products, including creams, lotions, and makeup.