Question

1) X Corporation reported the following data for the month of August: Inventories: Beginning Ending Raw materials $36,000 $24,000 Work in process $23,000 $17,000 Finished goods $37,000 $55,000 Additional information: Raw materials purchases $69,000 Direct labor cost $94,000 Manufacturing overhead cost incurred $54,000 Indirect materials included in manufacturing overhead cost incurred $8,000 Manufacturing overhead cost applied to Work in Process $56,000 The cost of goods sold that is adjusted for underapplied or overapplied overhead and that appears on the income statement for August is:

Answer 1

Direct material used = 36000+69000-24000-8000 = 73000

Total manufacturing cost = 73000+94000+56000 = 223000

Cost of goods manufactured = 23000+223000-17000 = 229000

Unadjusted cost of goods sold = 37000+229000-55000 = 211000

Over applied overhead = 56000-54000 = 2000

Adjusted cost of goods sold in income statement = 211000-2000 = 209000