Cerrone Inc. has provided the following data for the month of July. The balance
ID: 2336680 • Letter: C
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 $39,000 and at the end of the month was $47,000. The cost of goods manufactured for the month was $188,000. The actual manufacturing overhead cost incurred was $71,000 and the manufacturing overhead cost applied to Work in Process was $67,000. The adjusted cost of goods sold that would appear on the income statement for July is: Multiple Choice $196,000 $184,000 $180,000 $188,000
Explanation / Answer
Schedule of Cost of Goods Sold Finished goods inventory, beginning 39000 Add: Cost of goods manufactured 188000 Cost of goods available for sale 227000 Deduct: Finished goods inventory, ending 47000 Unadjusted cost of goods sold 180000 Add: Underapplied overhead 4000 =71000-67000 Adjusted cost of goods sold 184000 Option 2 is correct