Question

On January 1 Primary Manufacturing had a beginning balance in Work-in - Process Inventory of $81,600 and a beginning balance in Finished Goods Inventory of $22,000. During the year, Primary incurred manufacturing costs of $350,000. In addition, the following transactions occurred during the year: Job A-12 was completed for a total cost of $128,000 and was sold for $125,000. Job A-13 was completed for a total cost of $201,000 and was sold for $211,000. Job A-15 was completed for a total cost $61,000 but was not sold as of year-end. The Manufacturing Overhead account had an unadjusted credit balance of $12,000, and was adjusted to zero at year-end. What was the final balance in the Cost of Goods Sold account? O A. $329,000 debit balance O B. $317,000 debit balance OC. $12,000 credit balance O D. $341,000 debit balance

Answer 1

During the year, Job A-12 and Job A-13 were sold. Hence, cost of goods sold consists of the costs of Job A-12 and Job A-13.

Cost of Job A-12 = $128,000

Cost of Job A-13 = $201,000

Total unadjusted cost of goods sold = Cost of Job A-12 + Cost of Job A-13

= 128,000 + 201,000

= $329,000

Manufacturing overhead account had an unadjusted credit balance of $12,000. Credit balance in manufacturing overhead account indicates over applied manufacturing overhead.

Hence, adjusted balance in cost of goods sold = Total unadjusted cost of goods sold - Manufacturing overhead credit balance

= 329,000 - 12,000

= $317,000

Correct option is (B)

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