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Gest Inc. has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $57,800 and at the end of the month was $49,400. The cost of goods manufactured for the month was $281,000. The actual manufacturing overhead cost incurred was $86,200 and the manufacturing overhead cost applied to Work in Process was $76,000. The adjusted cost of goods sold that would appear on the income statement for November is:

Respuesta :

Zviko

Answer:

adjusted cost of goods sold is $279,200.

Explanation:

When Applied Overheads : $76,000 < Actual Overheads : $86,200, we say that overheads have been under-applied.

The Cost of Goods Sold must be adjusted with the amount of under-applied overheads.

Calculation of Cost of Goods Sold

Beginning Finished Goods inventory             $57,800

Add cost of goods manufactured                  $281,000

Less Ending Finished Goods inventory        ($49,400)

Cost of Goods Sold                                       $289,400

Then adjust this as follows :

Cost of Goods Sold                                       $289,400

Add Overheads Under - applied                  ($10,200)

Adjusted Cost of Goods Sold                       $279,200

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