Answer:
the Cost of Goods Sold balance after the proration is $56,140 (none of the suggested solutions)
Explanation:
<em>Step 1 Consider whether there was an Over or Under Application of Overheads.</em>
Applied Manufacturing Overhead $98,400 > Actual Manufacturing Overhead $93,000
Overheads were thus Over-Applied by $5,400
<em>Step 2 Allocate the Over- Application of Overheads to Closing Inventory in proportion to their weightings</em>
Item Total Weight % Allocation
Cost of Goods Sold $59,400 60.37% 3,260
Finished Goods Inventory accounts $39,000 39.63% 2,140
Total $98,400 100.00% 5,400
Balances after allocation :
Cost of Goods Sold = $59,400 - $3,260 = $56,140
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