Cienfuegos Corporation has provided the following data concerning last month's operations. Purchases of raw materials all direct $ 36,000 Direct labor cost $ 58,000 Manufacturing overhead applied to Work in Process $ 90,000 Actual Manufacturing overhead incurred $ 93,000 Beginning Ending Raw materials inventory $ 10,000 $ 21,000 Work in process inventory $ 62,000 $ 70,000 Finished goods inventory $ 36,000 $ 40,000 The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold

adjusted COGS 164,000

Explanation:

materials

10,000 + 36,000 = 46,000 availalbe materials

less 21,000 ending inventory = 25,000 used into production

direct labor 58,000

applied overhead 90,000

with the three cost components we calcualte cost added during the period.

cost added: 25,000 + 58,000 + 90,000 = 173,000

Then the cost of goods manufactured

beginning WIP 62,000

cost added 173,000

total 235,000

ending WIP (70,000)

COGM 165,000

Now, the COGS

Finished goods beginning 36,000

COGM 165,000

Ending finished goods (40,000)

Cost of goods sold 161,000

adjustment for overhead;

90,000 - 93,000 = - 3,000 underapplied we must recognize more overhead.

COGS debit 3,000

overhead credit 3,000

balance for COGS:

161,000 + 3,000 = 164,000