Question

L 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 $55,000 and at the end of the month was $30,300. The cost of goods manufactured for the month was $213,500. The actual manufacturing overhead cost incurred was $55,900 and the manufacturing overhead cost applied to Work in Process was $59,200. 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 is:a.$213,500 b.$234,900 c.$188.800 d.$238,200

Answer 1

Answer:

Adjusted cost of goods sold          234,900

Explanation:

To calculate the the adjusted cost of goods sold , we need to first determine the over or under applied overhead.

Over applied overhead = absorbed overhead - actual over heads

                                         =$59,200- $55,900

                                         = $3,300

This will be deducted from the the cost of goods produced because it is the amount by the which actual production has been over stated.

The adjusted cost of goods sold is determined as follows:

                                                             $

Opening inventory                           55,000

Cost of goods manufactured          213,000

Over applied overheads                  (3,300)

Less closing inventory                     (30,300)

Adjusted cost of goods sold          234,900