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
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