Asked by Jill Colleen Argame on Jun 11, 2024
Verified
Lenco Industries has cost of goods manufactured of $65 000 in May. The finished goods inventory at the end of May was $20 000 and the cost of goods sold during May was $75 000.
The inventory in finished goods at the beginning of May was:
A) $5000.
B) $30 000.
C) $10 000.
D) $20 000.
Finished Goods Inventory
Finished goods inventory consists of products that have completed the manufacturing process and are ready to be sold to customers.
Cost Of Goods Sold
Expenses directly related to the creation of a company's sold products, encompassing both materials and labor expenses.
Cost Of Goods Manufactured
The total production cost incurred by a company to manufacture products in a specific period, including materials, labor, and overhead.
- Compute the expense associated with goods sold and comprehend its significance in financial evaluations.
Verified Answer
AT
Alyssa TrevinoJun 14, 2024
Final Answer :
B
Explanation :
The beginning inventory in finished goods can be calculated using the formula: Beginning Inventory + Cost of Goods Manufactured - Cost of Goods Sold = Ending Inventory. Plugging in the given values: Beginning Inventory + $65,000 - $75,000 = $20,000. Solving for Beginning Inventory gives $30,000.
Learning Objectives
- Compute the expense associated with goods sold and comprehend its significance in financial evaluations.