Question

Luebke 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 $57,000 and at the end of the month was $30,500. The cost of goods manufactured for the month was $214,500. The actual manufacturing overhead cost incurred was $56,500 and the manufacturing overhead cost applied to Work in Process was $60,000. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. The adjusted cost of goods sold that would appear on the income statement for November

Answer 1

Answer:

Adjusted cost of goods sold = = $237,500

Explanation:

Given Opening inventory = $57,000

Cost Of Manufacturing for the month = $214,500

Closing value of inventory = $30,500

Net cost of Goods sold = Opening + Manufactured - Closing

= $57,000 + $214,500 - $30,500 = $241,000

Provided actual manufacturing overhead = $56,500

Applied to Work in process = $60,000

Difference between both of them = $60,000 - $56,500 = $3,500

Over applied cost of goods manufacturing overhead = $3,500

Charged to cost of goods sold

Thus cost of goods sold = $241,000

Adjusted cost of goods sold = Normal - Over applied = $241,000 - $3,500 = $237,500

Over applied manufacturing overhead has already been closed to cost of goods sold, that means that cost is included, now for adjusting such amount the value shall be deducted from cost of goods sold.

Final Answer

Adjusted cost of goods sold = Normal - Over applied = $241,000 - $3,500 = $237,500