Greenlands, Inc. began the year with three units of finishedgoods inventory that cost $6 each to manufacture. Greenlands alsoestablished a $6 per unit standard product cost for the upcomingaccounting period. The company actually incurred unit costs of $4for direct materials, $2 for direct labor, and $1 for factoryoverhead for the ten units it produced in the current period.Greenlands sold 11 units at $10 each during the accounting period.The firm accounted for inventory on a first-in, first-out (FIFO)basis.
Required: Compute Greenlands’ costof goods manufactured, cost of goods sold, and grossprofit.
Cost of Goods Manufactured
Direct materials | |
+ direct labor | |
+ factory overhead | |
Cost of goods manufactured | |
Cost of Goods Sold
Beginning inventory of finished goods | |
+ Cost of goods manufactured | |
Finished goods available for sale | |
- Ending inventory of finished goods | |
Cost of goods sold | |
          Â
Income Statement
Sales revenue | |
Cost of goods sold | |
Gross profit | |
Balance Sheet
