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ABC Manufacturing Inc. ends the month with two jobs still in progress. Job 5 has $10,000...

ABC Manufacturing Inc. ends the month with two jobs still in progress. Job 5 has $10,000 of materials, $2,000 of direct labor and $8,000 of manufacturing overhead allocated. Job 6 was $30,000 of materials, $2,000 of direct labor and $10,000 of manufacturing overhead allocated. The cost of goods sold for the month was $40,000 and of that 30% was overhead. There were no finished goods in stock as the month ends. If the manufacturing overhead is underallocated by $10,000, which of the following choices would be the correct way to prorate it, assuming the proration is based on the allocated overhead in the ending balances of work-in-process, finished goods, and cost of goods sold?
Select one:
A. Cost of goods sold would be reduced by $3,300
B. Job 5 would be allocated another $2,500 of cost
C. Job 6 would be allocated another $4,000 of cost
D. Cost of goods sold would be increase by $10,000

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ekkarill92 answered 1 year ago
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