Mckeighan Inc. has provided the following data for the month of November. There
ID: 2498551 • Letter: M
Question
Mckeighan Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Work in Process Finished Good Cost of Goods Sold Total
Direct Materials $5,500 $18,060 $84,630 $108,190
Direct Labor 6,780 24,080 112,840 143,700
Manufacturing overhead applied 3,960 11,220 50,820 66,000
Total $16,240 $53,360 $248,290 $317,890
Manufacturing overhead for the month was underapplied by $3,000.
The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The finished goods inventory at the end of November after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:
$53,864
$53,870
$52,856
$52,850
$53,864
$53,870
$52,856
$52,850
Explanation / Answer
W in P FG Cost of Goods Sold DM 5500 18060 84630 108190 DL 6780 24080 112840 143700 MOH Applied 3960 11220 50820 66000 16240 53360 248290 317890 MOH applied proprtion 0.06 0.17 0.77 (3960,11220,50820/66000) 180 510 2310 3000 (3000*.06,0.17,0.77) FG Value 53870 (53360+510) Answer B