Beginning Inventory

+Purchase of Direct Materials

=Cost of Direct Material Available For Use

-Ending Inventory

+Direct Labor

+Factory Overhead Expenses

=Manufactured Costs Incurred

+Work In Progress Inventory (Beginning)

=Manufacturing Costs to Account For

-Work In Progress Inventory (Ending)

=Cost of Goods Manufactured

Since the Cost of Goods Manufactured has already been given to you, next you calculate the Cost of Goods Sold.

Finished Goods Inventory (Beginning)

+Cost of Goods Manufactured

=Cost of Goods Available for Sale

-Finished Goods Inventory (Ending)

=Cost of Goods Sold

252,000

+516,000

=768,000

-264,000

=504,000

Based on this formula, my answer is $504,000.

Opening Finished Goods

+ Cost Of Goods Manufactured

– Closing Finished Goods

The value of opening and closing WIP (work in progress) affects Cost Of Goods Manufactured. However, since your question directly provides the value of Cost Of Goods Manufactured, we have to assume that the movement in WIP has already been taken into account.

Therefore, Johns Inc’s Cost Of Goods Sold is:

Opening Finished Goods           252,000

+ Cost Of Goods Manufactured  516,000

– Closing Finished Goods           (264,000)

Cost of Goods Sold                   502,000