Cerrone Inc. has provided the following data for the month of July. The balance
ID: 2416203 • 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 $51,800 and at the end of the month was $44,700. The cost of goods manufactured for the month was $246,000. The actual manufacturing overhead cost incurred was $127,400 and the manufacturing overhead cost applied to Work in Process was $121,000. The adjusted cost of goods sold that would appear on the income statement for July is:
$246,700
$253,100
$259,500
$238,900
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 $51,800 and at the end of the month was $44,700. The cost of goods manufactured for the month was $246,000. The actual manufacturing overhead cost incurred was $127,400 and the manufacturing overhead cost applied to Work in Process was $121,000. The adjusted cost of goods sold that would appear on the income statement for July is:
Explanation / Answer
Cost of goods sold = Beginning finished goods + Cost of goods manufactured - Ending finished goods
Cost of goods sold = $51,800 + $246,000 - $44,700 = $253,100
The under application of manufacturing oeread shall be charged to cost of goods sold.
Uner appliation of manufacturing overhead = $127,400 - $121,000 = $6,400
Adjusted cost of goods sold = $253,100 + $6,400 = $259,500