BigCo manufactures radiators for high end automobiles that i

BigCo manufactures radiators for high end automobiles that it sell to two large auto manufacturers. On December 31, 2014 it had ending finished goods inventory of $120,000 and recorded cost of goods sold of $2,500,000 in its income statement for the year ended December 31, 2014. If beginning finished goods inventory as of January 1, 2014 was $330,000 what would be BigCo\'s cost of goods manufactured for the year ended December 31, 2014?

Solution

Solution - Calculation of Cost of goods Manufactured

Beginning Inventory on January 1, 2014 = $330000

Cost of goods sold = $2500000

Ending Inventory on December 31, 2014 = $120000

Formula = Cost of goods Manufactured = Cost of goods Sold + Ending Inventory - Beginning Inventory

Cost of Goods Manufactured