Question

In: Accounting

During its first year of operations, Motorola Company paid $11,860 for direct materials and $10,900 for...

During its first year of operations, Motorola Company paid $11,860 for direct materials and $10,900 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,900 while general, selling, and administrative expenses totaled $3,600. The company produced 7,100 units and sold 4,400 units at a price of $7.10 a unit.

What is Motorola's cost of goods sold for the year?

A. $20,240

B. $26,360

C. $16,336

D. $32,660

Solutions

Expert Solution

A. $20,240

Working:

Cost of goods sold is the direct cost of goods manufactured.It includes direct materials,direct labor and other cost directly attributable to the manufacturing of goods.
Step-1:Calculation of cost of goods manufactured
Direct Materials $       11,860
Production workers' wages           10,900
Lease payments and utilities on the production facilities              9,900
Cost of goods manufactured           32,660
Step-2:Calculation of Cost of goods manufactured per unit
Cost of goods manufactured $       32,660
/ Units manufactured 7100
Per unit cost of goods manufactured $            4.60
Step-3:Calculation of cost of goods sold
Cost of goods sold = Units sold x Manufacturing cost per unit
=              4,400 x $            4.60
= $       20,240

ekkarill92 answered 1 year ago
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