Question

Help Save & EX efore prorating the manufacturing overhead costs at the end of 2020, the cost of Goods Sold and Finished Goods Inventory accounts had applied overhead costs of $59.000 nd $5.000 in them, respectively. There was no Work-In-Process at the beginning or end of 2020. During the year, manufacturing overhead costs of $89.000 were actualy ncurred. The balance in the Applied Manufacturing Overhead was $94.000 at the end of 2020. If the under-or overappiled overhead is prorated between Cost of Goods Sold and the Inventory accounts, what will be the cost of Goods Sold balance after the proration? (Rounded to the nearest whole dollar) Multiple Choice 0 0 0 0

Answer 1

According to the question, applied overhead costs in Cost of goods sold = $59,000 & Felneished goods = $ 35,000 Manufae turing overhead costs = $89,000 balance in applied manufacturing Overhead cost = $94,000 so, Overe applied Overhead- (Balance in applied manufacturing overchead Cost - Manufacturing overhead Costs) = ($94,000 - $89,000) = $5,000 Hence, cost of goods sold after the proration, applied orenhead cost en cost of goods sold 1 x Overt (apwed Overhead Cosz in Cost of goods sold applied + teheshed cost of goods) Over head $5,000 ſ$59,000 [($59,000+ $35,000) ) ( $ 59,800_) * $5,000 $94,000) $3,138. 2978 after broration - so amount of cost of goods old = ($ 59,000 - $ 3,1 38.2978) = $ 55,861.7022 ^ $55,862 Thus correct answer is option la).