Question

Maple Mount Fishery is a canning company in Astoria. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs. Budgeted factory overhead for the year was $680,000, and management budgeted $322,000 of direct labor costs. During the year, the company incurred the following actual costs. Direct materials used $389,000 Direct labor 318,000 Factory overhead 653,400 The January 1 balances of inventory accounts are shown below. Materials — all direct $62,800 Work-in-process 41,000 Finished goods 25,600 The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year. The adjusted cost of goods sold, after under or overapplied overhead, is

Answer 1

Answer-------Adjusted cost of Goods sold = $1,367,060

Working

Schedule of Cost of Goods Manufactured
Direct Material Used		$      389,000.00
Direct labor		$      318,000.00
Total Manufacturing overheads applies(680000/322000 x 318000)		$      671,552.80
Total manufacturing Cost During the month		$   1,378,552.80
Add: Work in progess Beginning		$         41,000.00
Total Work in Process		$   1,419,552.80
Less: Work in progress Ending		$         36,900.00
Cost of Goods Manufactured		$   1,382,652.80

.

Schedule of cost of goods sold
Beginning Finished Goods Inventory		$         25,600.00
Add: Cost of goods manufactured		$   1,382,652.80
Goods Available for sale		$   1,408,252.80
Less :Ending Finished goods Inventory		$         23,040.00
Unadjusted Cost of Goods Sold		$   1,385,212.80
Overapplied Manufacturing overheads		$      (18,152.80)
Adjusted cost of goods sold		$   1,367,060.00