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Carmen Company’s factory overhead account showed a $3,600 overapplied balance on December 31. Other accounts showed...

Carmen Company’s factory overhead account showed a $3,600 overapplied balance on December 31. Other accounts showed the following balances at year end:

Raw materials $ 50,000
Work in Process 20,000
Finished Goods 30,000
Cost of Goods Sold 450,000


The company deems the overapplied overhead to be material in amount. How much is cost of goods sold after adjustment for the overapplied overhead?

$453,240
$446,760
$453,600
$447,055

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Expert Solution

Inventory Amount Proportion (a) Under/ (over) applied OH allocation
[$3,600 X (a)]		 New balance
WIP $                                 20,000 4.00% $                 (144.00) $   19,856.00
Finished goods $                                 30,000 6.00% $                 (216.00) $   29,784.00
Cost of goods sold $                               450,000 90.00% $              (3,240.00) $ 446,760.00
Total $                              500,000 100.00% $             (3,600.00) $ 496,400.00

New balance is 446,760.

please rate.

ekkarill92 answered 2 years ago
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