Question

Entin Corporation reported the following data for the month of January: the adjusted cost of goods sold that appears on the income statement for January is: A. $197,900 B. $200,000 C. $201,000 D. $199,000

8. Entin Corporation reported the following data for the month of January Ending Inventories Raw materials. Work in process............... Finished goods. Beginning $32,000 $11.000 $45.000 $38.000 $17.000 $47.000 Additional information: Raw materials purchases. Direct labor cost Manufacturing overhead cost incurred ....... Indirect materials included in manufacturing overhead cost incurred Manufacturing overhead cost applied to Work in Process....... $65.000 $88.000 $64.000 $3,000 $61.000 The adjusted cost of goods sold that appears on the income statement for January is: A. $197,000 B. $200,000 C. $201,000 D. $199,000

Answer 1

Calculation of Adjusted cost of goods sold

Direct materials:
Beginning raw materials inventory	$32000
Add: Purchases of raw materials	65000
Total raw materials available	97000
Less: Ending raw materials inventory	-38000
Raw materials used in production	59000
Less: Indirect materials	-3000
Direct materials		$56000
Direct labor		88000
Manufacturing overhead applied		61000
Total manufacturing costs		205000
Add: Beginning work in process inventory		11000
		216000
Less: Ending work in process inventory		-17000
Cost of goods manufactured		199000
Add: Beginning finished goods inventory		45000
		244000
Less: Ending finished goods inventory		-47000
Unadjusted cost of goods sold		197000
Add: Underapplied overhead		3000
Adjusted cost of goods sold		$200000

Under or over applied overhead= Manufacturing overhead cost incurred-Manufacturing overhead cost applied

= $64000-61000= $3000 under applied

So, the answer is option B) $200000