{"id":190904,"date":"2025-02-14T03:35:17","date_gmt":"2025-02-14T03:35:17","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=190904"},"modified":"2025-02-14T03:35:19","modified_gmt":"2025-02-14T03:35:19","slug":"cold-creek-kayaks-a-manufacturing-company","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/02\/14\/cold-creek-kayaks-a-manufacturing-company\/","title":{"rendered":"Cold Creek Kayaks, a manufacturing company"},"content":{"rendered":"\n

Cold Creek Kayaks, a manufacturing company, has beginning finished goods inventory of $25,000; cost of goods manufactured of $320,000; and ending finished goods inventory of $32,000. What is the cost of goods available for sale? Cost of goods available for sale<\/p>\n\n\n\n

The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n

Answer:<\/strong><\/h3>\n\n\n\n

The cost of goods available for sale<\/strong> is calculated using the following formula:<\/p>\n\n\n\n

[
\\text{Cost of Goods Available for Sale} = \\text{Beginning Finished Goods Inventory} + \\text{Cost of Goods Manufactured}
]<\/p>\n\n\n\n

Given:<\/p>\n\n\n\n

    \n
  • Beginning Finished Goods Inventory<\/strong> = $25,000<\/li>\n\n\n\n
  • Cost of Goods Manufactured<\/strong> = $320,000<\/li>\n<\/ul>\n\n\n\n

    [
    \\text{Cost of Goods Available for Sale} = 25,000 + 320,000 = 345,000
    ]<\/p>\n\n\n\n

    Thus, Cost of Goods Available for Sale = $345,000<\/strong>.<\/p>\n\n\n\n

    \n\n\n\n

    Explanation:<\/strong><\/h3>\n\n\n\n

    Cost of Goods Available for Sale (COGAS) is an essential metric in managerial and financial accounting. It represents the total cost of inventory available for sale during a given period before accounting for the ending inventory.<\/p>\n\n\n\n

    Understanding the Formula:<\/strong><\/h4>\n\n\n\n
      \n
    1. Beginning Finished Goods Inventory:<\/strong>
      This is the value of finished goods carried over from the previous period. In this case, it is $25,000<\/strong>.<\/li>\n\n\n\n
    2. Cost of Goods Manufactured (COGM):<\/strong>
      COGM refers to the total production costs incurred during the period, including direct materials, direct labor, and manufacturing overhead. For Cold Creek Kayaks, this value is $320,000<\/strong>.<\/li>\n\n\n\n
    3. Cost of Goods Available for Sale Calculation:<\/strong>
      By adding the beginning finished goods inventory<\/strong> to cost of goods manufactured<\/strong>, we get the total inventory value available for sale before deducting ending inventory.<\/li>\n\n\n\n
    4. What About Ending Inventory?<\/strong>
      The ending finished goods inventory ($32,000) is not<\/strong> included in the COGAS calculation. Instead, it is subtracted from COGAS when calculating Cost of Goods Sold (COGS)<\/strong>.<\/li>\n<\/ol>\n\n\n\n

      Importance of Cost of Goods Available for Sale:<\/strong><\/h4>\n\n\n\n
        \n
      • Helps Determine Cost of Goods Sold (COGS):<\/strong>
        Once the ending inventory is subtracted from COGAS, we get COGS, which is a key expense on the income statement.<\/li>\n\n\n\n
      • Financial Reporting & Decision-Making:<\/strong>
        Businesses use COGAS to assess inventory levels, pricing strategies, and production efficiency.<\/li>\n\n\n\n
      • Comparison with Revenue:<\/strong>
        Comparing COGAS with sales helps determine gross profit margins and overall business performance.<\/li>\n<\/ul>\n\n\n\n

        Thus, for Cold Creek Kayaks, the cost of goods available for sale is $345,000<\/strong>, serving as the foundation for further financial analysis.<\/p>\n","protected":false},"excerpt":{"rendered":"

        Cold Creek Kayaks, a manufacturing company, has beginning finished goods inventory of $25,000; cost of goods manufactured of $320,000; and ending finished goods inventory of $32,000. What is the cost of goods available for sale? Cost of goods available for sale The Correct Answer and Explanation is : Answer: The cost of goods available for […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-190904","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/190904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=190904"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/190904\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=190904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=190904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=190904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}