Question

Beginning Ending Raw materials $45,000 $51,000 Work in process $66,000 $74,000 Finished goods $38,000 $27,000 Raw materials purchases $88,000 Direct labor cost $94,000 Actual Manufacturing overhead cost incurred $53,000 Indirect materials included in manufacturing overhead cost incurred $13,000 Manufacturing overhead cost applied to Work in Process $52,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The adjusted cost of goods sold that appears on the income statement for July is:

Answer 1

Actual Manufacturing overhead cost = $53,000

Applied manufacturing overhead cost = $52,000

Under applied manufacturing overhead =  Actual Manufacturing overhead cost- Applied manufacturing overhead cost

= 53,000-52,000

= $1,000

Cost of Goods Manufactured Schedule
Direct materials:
Raw materials inventory beginning	45,000
Add: Material purchased	88,000
Total raw materials available	133,000
Less: Raw materials inventory ending	-51,000
Raw material used in production	82,000
Less: Indirect materials used in production	-13,000
Direct materials used in production		69,000
Direct labor		94,000
Manufacturing Overheads costs applied		52,000
Total Manufacturing Costs		215,000
Add: Work in process inventory, beginning		66,000
Total cost of work in process		281,000
Less:Work in process inventory ending		-74,000
Cost of goods manufactured		$207,000

Schedule of Cost of Goods Sold
Finished goods inventory, beginning	38,000
Cost of goods manufactured	207,000
Cost of goods available for sale	245,000
Finished goods inventory, Ending	-27,000
Unadjusted Cost of goods sold	218,000
Under applied manufacturing overhead	1,000
Adjusted Cost of goods sold	$219,000

The adjusted cost of goods sold that appears on the income statement for July is:$219,000.