In July B&B Company purchased materials costing $23,100 and incurred direct labor cost of $19,800. Manufacturing overhead totaled $35,200 for the month. Information on inventories was as follows:

	July 1	July 31
Materials	$6,820	$8,000
Work in process	800	1,320
Finished goods	3,630	2,970

If B&B Company sold 10,300 units during July and its gross margin totaled $32,780, what was the Cost of Goods Sold for July 31?

a.

$69,500

b.

$70,400

c.

$76,400

*d.

$77,060

RATIONALE:

SUPPORTING CALCULATIONS:

Materials inventory, July 1	$ 6,820
Purchases	23,100
Materials inventory, July 31	(8,000)
Direct materials used in July	$21,920

Direct materials used in July	$21,920
Direct labor	19,800
Manufacturing overhead	35,200
Total manufacturing costs in July	$76,920

Total manufacturing costs	$77,110
Work in process, July 1	800
Work in process, July 31	(1,320)
Cost of goods manufactured	$76,400

Cost of goods manufactured		$76,400
Finished goods inventory, July 1		3,630
Finished goods inventory, July 31		(2,970)
Cost of goods sold		$77,060

Gross margin	$ 32,780
Cost of goods sold	77,220
Sales (10,300 $?)	$110,000
Sales price per unit ($110,000 / 10,300 units)	$10.68