Question

urvin Enterpris ecorded during a recent month is shown below es is a manufacturing company that had no beginning inventories. A subset of the transactions that it a. $76,500 in raw materials were purchased for cash. b. $71,400 in raw materials were used in production Of this amount, $65,700 was for direct materials and the remainder was for indirect materials. c Total labor wages of $150 100 were incurred and paid. Of this amount, $133,000 was for direct labor and the remainder was for indirect labor d. Additional manufacturing overhead costs of $125,700 were incurred and paid. e. Manufacturing overhead of $127,500 was applied to production using the company's predetermined overhead rate f. All of the jobs in process at the end of the month were completed. g. All of the completed jobs were shipped to customers h. Any underapplied or overapplied overhead for the period was daosed to Cost of Goods overthead for the period was dosed to Cost of Goods Sold Required: 1 Post the above transactions to T-accounts. 2 Determine the adjusted cost of goods sold for the period.

Answer 1

Answer 1:

Answer 2:

Workings:

From T accounts as above, Adjusted cost of goods sold = $347,200

It can be worked out as:

Adjusted cost of goods sold = Cost of goods sold + Under applied overhead

= (Direct material + Direct Labor + Applied Overhead) + [(Indirect material + Indirect labor + Additional manufacturing overhead) - Applied Overhead]

= (65700 + 133000 + 127500) + (5700 + 17100 + 125700) - 127500

= $347,200