Question

Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $51,500 and at the end of the month was $47,250. The cost of goods manufactured for the month was $237,300. The actual manufacturing overhead cost incurred was $77,700 and the manufacturing overhead cost applied to jobs was $73,500. The adjusted cost of goods sold that would appear on the income statement for July is:

$237,300 $241,500 $233,100 $245,750

Answer 1

The answer is $ 245,750

Calculation of Under/ Overapplied Overhead

Actual manufacturing overhead cost incurred	$          77,700
Manufacturing overhead cost applied	$          73,500
Under Applied Overhead Cost	$            4,200

Schedule of Cost of Goods Sold
Finished goods inventory, beginning	$          51,500
Add: Cost of goods manufactured	$        237,300
Cost of goods available for sale	$        288,800
Deduct: Finished goods inventory, ending	$          47,250
Unadjusted cost of goods sold	$        241,550
Add: Underapplied overhead	$            4,200
Adjusted cost of goods sold	$        245,750

Dear Student,

Best effort has been made to give quality and correct answer. But if you find any issues please comment your concern. I will definitely resolve your query.