Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $120,000 Advertising expense $45,000Depreciation on plant 60,000 Property taxes on plant 14,000Property taxes on store 7,500 Delivery expense 21,000Labor costs of assembly- 110,000 Sales commissions 35,000line workersFactory supplies used 23,000 Salaries paid to sales clerks 50,000Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.Compute: Cost of goods manufactured $Compute cost of goods sold.

Cost of goods manufactured is $323,500

Cost of goods sold is $337,900

Explanation:

Given:

Materials used in product = $120,000

Advertising expense = $45,000

Depreciation on plant = $60,000

Property taxes on plant = $14,000

Property taxes on store = $7,500

Delivery expense = $21,000

Labor costs of assembly-line workers = $110,000

Sales commissions = $35,000

Factory supplies used = $23,000

Salaries paid to sales clerks = $50,000

Work in process inventory was $12,000 at January 1 and $15,500 at December 31.

Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.

(a) Cost of goods manufactured = Materials used in product + Depreciation on plant + Labor costs of assembly-line workers + Property taxes on plant +  Factory supplies used + Beginning work in process - ending work in process

= $120,000 + $60,000 + $110,000 + $14,000 + $23,000 + $12,000 - $15,500

= $323,500

(b) Cost of goods sold = Cost of goods manufactured + opening finished goods inventory - Closing finished goods inventory

= $323,500 + $60,000 - $45,600

= $337,900