A company had the following information for the year: Direct materials used $ 150,000 Direct labor incurred (1,250 hours) $ 87,000 Actual manufacturing overhead incurred $ 35,000 The company used a predetermined overhead rate of $22 per direct labor hour for the year. Assume all inventory account balances were unchanged during the period except the Finished Goods inventory balance decreased by $20,000 during the period. Assume over- and underapplied manufacturing overhead is closed out to cost of goods sold. What was adjusted cost of goods sold

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anthougo anthougo · Answer 1 · 2021-03-11T04:09:06+01:00

Answer:

The adjusted cost of goods sold was:

= $27,500.

Explanation:

a) Data and Calculations:

Direct materials used $ 150,000

Direct labor incurred (1,250 hours) $ 87,000

Applied manufacturing overhead

(1,250 * $22) $ 27,500

Actual manufacturing overhead incurred $ 35,000

Underapplied manufacturing overhead $ 7,500 ($35,000 - $27,500)

Cost of goods sold = $20,000 (Decrease from Finished Goods Inventory)

Adjusted cost of goods sold = $27,500 ($20,000 + $7,500)

ayokenny2001 ayokenny2001 · Answer 2 · 2021-12-14T10:41:12+01:00

The adjusted cost of goods sold was $27,500

Please see computation of adjusted cost of goods sold

Direct materials used $150,000

Direct labor incurred (1,250 hours) $87,000

Applied manufacturing overhead

(1,250 * $22) $27,500

Actual manufacturing overhead incurred $35,000

Underapplied manufacturing overhead $ 7,500 ($35,000 - $27,500)

Cost of goods sold

= $20,000 (This is the decrease from finished goods inventory)

Adjusted cost of goods sold

= $27,500 ($20,000 + $7,500)

Therefore, the adjusted cost of goods sold was $27,500

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