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Morning Smiles Coffee Company manufactures Stoneware French Press coffee makers. During the month of March, 8,100 coffee makers were completed at a cost of goods manufactured of $607,500. Suppose that on March 1, Morning Smiles had 1,000 units in finished goods inventory costing $70,000 and on March 31, 1,100 units in finished goods inventory costing $65,000. 1. Prepare a cost of goods sold statement for the month of March. Morning Smiles Coffee Company Cost of Goods Sold Statement For the Month of March Cost of goods manufactured $Cost of goods manufactured 607,500 Finished goods inventory, March 1 Finished goods inventory, March 1 70,000 Finished goods inventory, March 31 Finished goods inventory, March 31 64,800 Cost of goods sold

Answer :

ANTHOUGOGO

The preparation of the Cost of Goods Sold Statement for the month of March for Morning Smiles Coffee Company is as follows:

Cost of Goods Sold Statement

For the Month ended March 31,

Cost of goods manufactured            $607,500

Finished goods inventory, March 1       70,000

Finished goods inventory, March 31   (65,000)

Cost of goods sold                           $612,500

How is the cost of goods sold computed?

The cost of goods sold is equal to the beginning inventory of finished goods plus the cost of goods manufactured (purchased), less ending inventory.

Data and Calculations:

Number of coffee makers completed = 8,100

Cost of goods manufactured = $607,500

Finished goods:

                                     Units       Costs

Beginning balances    1,000     $70,000

Goods manufactured 8,100   $607,500

Ending balances         1,100     $65,000

Goods sold                8,000   $612,500

Thus, the cost of goods sold (8,000 units) is $612,500.

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