Answer:
COGS= $241,000
Explanation:
<u>First, we need to calculate the cost of goods manufactured with allocated overhead:</u>
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 28,000 + 68,000 + 98,000 + 72,000 - 23,000
cost of goods manufactured= $243,000
<u>Now, we determine the cost of goods sold:</u>
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 57,000 + 243,000 - 61,000
COGS= $239,000
<u>Finally, we close the under/over applied overhead to COGS:</u>
<u></u>
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 74,000 - 72,000
Underapplied overhead= $2,000
<u>We need to debit COGS and credit overhead:</u>
COGS 2,000
Manufacturing overhead 2,000
COGS= 239,000 + 2,000
COGS= $241,000
