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 1 year ago

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