Cost of goods sold

Vikram k (CS) (25 Points)

08 June 2010  

 

Hi, I’m new to accounting and trying to solve a text book problem. Can anyone help me understand, how the author calculated purchase in Cost of goods sold?

Question: 

Direct labor cost 16,000

Cost of goods sold 56,000

Opening and Closing Balances

Raw Material                        8,000    8,600

Work-in-progress                8000    12,000

Finished goods                   14,000   18,000

Selling expenses                                 3,400

General Admin                    2,600

Sales for the month            75,000

Solution given:

A)    Sales (given)                                                                                        75,000

B)    Cost of goods sold:

                Raw Materials Consumed:

                                Opening stock (given)                        8,000

                                Purchase (balancing figure)             36,000

                                                                                                44,000

                                Closing stock                                        (8,600)   35,400