Lopez Corporation incurred the following costs during 2022.

Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $45,600 at December 31. 

Instructions

a. Compute cost of goods manufactured.

b. Compute cost of goods sold.

c. For those costs not included in the calculations in part (a) or part (b), explain how they would be classified and reported in the financial statements.

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Direct materials used in product Depreciation on factory Property taxes on store Labor costs of assembly-line workers Factory supplies used $120,000 60,000 7,500 110,000 23,000 Advertising expense Property taxes on factory Delivery expense Sales commissions Salaries paid to sales clerks $45,000 14,000 21,000 35,000 50,000