Question

Luebke Inc. has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $56,000 and at the end of the month was $30,400. The cost of goods manufactured for the month was $214,000. The actual manufacturing overhead cost incurred was $56,200 and the manufacturing overhead cost applied to Work in Process was $59,600. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. The adjusted cost of goods sold that would appear on the income statement for November is:

a. $188,400

b. $214,000

d. $236,200

d. $239,600

Answer 1

Answer

--Correct Answer = Option [c] $ 236,200

Beginning Finished Goods Inventory	$56,000
Add: Cost of Goods manufactured	$214,000
Less: Ending finished goods inventory	$30,400
Unadjusted Cost of Goods Sold	$239,600
Less: Over - Applied Overhead	$3,400 [see working]
Adjusted Cost of Goods Sold	$236,200 = Answer

--Working

Overheads applied	$59,600
Less: Actual Overheads	$56,200
Over-Applied Overheads	$3,400