A fimm had beginning finished goods inventory of $10

Accounting Nov 12, 2020

A fimm had beginning finished goods inventory of $10.000; its cost of goods manufactured was $37 500: Its gros morgin was $40,000: and its sales were $70,000. The ending finished goods inventory Select one: O 0.535,000 b. $ 20.000 O c5 30.000 0.5 17.500

Expert Solution

Solution:-

The Correct option is 4th i.e, $17,500

Explanation:-

Firstly we calculate the Cost of goods sold:

Sales	$70,000
Less:- Gross Margin	($40,000)
Cost of goods Sold	$30,000

In next step we calculate the Ending Finished Goods Inventory

Cost of Goods Manufactured	$37,500
Add:- Beginning Finished Goods Inventory	$10,000
Less:- Cost of Goods Sold {see above}	($30,000)
Ending Finished goods Inventory	$17,500

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