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For the year, Redder Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000, and ending finished goods inventory of $250,000. The cost of goods sold is:_______.

Respuesta :

The cost of goods sold is: 550,000.

Explanation:

Inventory refers to the stock that holds the materials of the business. It may be raw materials, finished goods, semi finished goods, etc. The cost of goods sold refers the amount of goods that are moved from the inventory and sold. The cost of goods sold can be calculated with the following formula:

Cost of goods sold= Beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory

In the given example the cost of the manufactured goods is $600,000 and the beginning and the ending inventory of finished goods is $200,000 and $250,000 respectively.  

Thus the cost of goods sold=   $200,000 + $600,000 - $250,000 =  $ 550,000.

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