(WIP) ACC 350 Exam 1 Study Material

e. 7-2
P.
12. Which of the following describes the formula for cost of goods manufactured?
A) Direct materials used plus direct labor plus overhead minus beginning inventory of work- in-process
plus ending inventory of work- in -process.
B) Direct materials used plus direct labor plus overhead plus beginning inventory of work- in- process
minus ending inventory of work- in- process.
C) Beginning inventory of raw materials plus purchases of raw materials less ending inventory raw
materials.
D) Beginning inventory of finished goods plus purchases of direct materials less ending inventory of
finished goods.
COMPUTATIONAL PROBLEM
13. Pringlay Company had the following transactions last month:
Purchased Raw Materials - $10,000
Issues RM as supplies - $1,000
Incurred Direct labor costs - $5,000
Paid freight-in - $2,000
Paid freight-out - $7,000
Depreciation on plant - $6,000
Depreciation on office equipment - $4,000
Plant manager’s salary - $2,500
Quality Inspector’s salary - $1,500
Marketing Manager’s salary - $3,500
Sales Commissions – 5% of sales
Sales - $65,000
Ending Raw Materials Inventory increased $3,000 from beginning of the month
Ending WIP Inventory did not change from beginning of the month
Ending FG Inventory decreased $8,000 from the beginning of the month
What was COGS for last month?