Question

Coatney Incorporated has provided the following data for the month of October. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Total Direct materials $ 3,760 $15,870 $ 76,130 $ 95,760 Direct labor 2,400 12,420 59,580 74,400 Manufacturing overhead applied 1,950 6,240 30,810 39,000 Total $ 8,110 $34,530 $166,520 $209,160 Manufacturing overhead for the month was overapplied by $7,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The finished goods inventory at the end of October after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:

Answer 1

Answer:

$33,410

Explanation:

The computation of Ending finished goods inventory after allocation of underapplied or overapplied manufacturing overhead is shown below:-

Ending finished goods inventory after allocation of overapplied manufacturing overhead

= (Total of finished goods - (Manufacturing overhead applied of finished goods ÷ Total of Manufacturing overhead applied) × Overapplied amount

= ($34,530 - ($6,240 ÷ $39,000) × $7,000)

= $34,530 - $1,120

= $33,410