Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $54,000 and at the end of the month was $49,500. The cost of goods manufactured for the month was $248,600. The actual manufacturing overhead cost incurred was $81,400 and the manufacturing overhead cost applied to jobs was $77,000. The adjusted cost of goods sold that would appear on the income statement for July is:

a. $283,600

b. $264,400

c. $277,800

d. $289,400

Question

Business

Clare

10 January, 18:49

Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $54,000 and at the end of the month was $49,500. The cost of goods manufactured for the month was $248,600. The actual manufacturing overhead cost incurred was $81,400 and the manufacturing overhead cost applied to jobs was $77,000. The adjusted cost of goods sold that would appear on the income statement for July is:

a. $283,600

b. $264,400

c. $277,800

d. $289,400

+4

Answers (1)

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Thornton · Answer 1

The correct answer is $257,500 (not one of the multiple choices)

Explanation:

The costs of good sold = opening inventory+costs of goods manufactured-closing inventory

opening inventory is worth is $54,000

costs of goods manufactured is $248,600

closing inventory is n $49,500

costs of goods sold=$54,000+$248,600-$49,500=$ 253,100.00

However overhead was under-applied by $4400 ($81400-$77,000) which must be added to costs of goods sold, hence the corrected costs of goods sold is $257,500 ($253,100+$4,400)

This is not one of the options