The cost of goods sold for Mario Corporation in 2030 was P1, 631, 000. The January 1, 2030 finished goods inventory balance was P221, 200, and the December 31, 2030 finished goods inventory balance was P 169, 400. Cost of goods manufactured during the period was:

INTRODUCTION TO COST ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	P1, 682, 000
B	P2, 021, 600
C	P1, 579, 200
D	P1, 631, 000

Explanation:

Detailed explanation-1: -Cost of goods sold formula Starting inventory + purchases − ending inventory = cost of goods sold.

Detailed explanation-2: -COGS = Beginning inventory + purchases + Freight In – Ending inventory – Purchase Discounts – Purchase Returns and Allowances. Beginning inventory: this is the inventory amount at the opening of the stock period.

Detailed explanation-3: -In order to calculate COGM, just add the Beginning WIP Inventory to the Total Manufacturing Cost, and subtract the Ending WIP Inventory. This will give you the total cost of the goods that were finished during the specified period. Read more about Work in Process Inventory Accounting.

Detailed explanation-4: -The finished goods inventory formula (finished goods inventory = beginning finished goods + cost of manufactured goods-COGS) refers to the calculation businesses use to determine how many inventory items are ready for sale.

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