Morton 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 $50,000 and at the end of the month was $46,000. The cost of goods manufactured for the month was $236,000. The actual manufacturing overhead cost incurred was $84,000 and the manufacturing overhead cost allocated to Work in Process was $80,000. The adjusted cost of goods sold that would appear on the income statement for November is

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Business

Wayne Combs

21 November, 09:09

Morton 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 $50,000 and at the end of the month was $46,000. The cost of goods manufactured for the month was $236,000. The actual manufacturing overhead cost incurred was $84,000 and the manufacturing overhead cost allocated to Work in Process was $80,000. The adjusted cost of goods sold that would appear on the income statement for November is

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Yuliana Jones · Answer 1

Cost of goods sold = $244,000

Explanation:

We will calculate the manufacturing overhead underapplied or over applied

Manufacturing overhead underapplied = Incurred overhead - Overhead applied

Manufacturing overhead underapplied = 84,000 - 80,000

Manufacturing overhead underapplied = $4,000

Cost of goods sold = Start finished good inventory - Ending finished good inventory + cost of good manufactured + overhead underapplied

Cost of goods sold = 50,000 - 46,000 + 236,000 + 4,000

Cost of goods sold = $244,000