Question

13) Cienfuegos Corporation has provided the following data concerning last month's operations. Purchases of raw materials Indirect materials included in manufacturing overhead Direct labor cost Manufacturing overhead applied to Work in Process Overapplied overhead $ 36,000 $ 4,000 $ 58,000 $ 90,000 $ 3,000 I Raw materials inventory Work in process inventory Finished goods inventory Beginning $ 10,000 $ 62,000 $ 36,000 Ending $ 21,000 $ 70,000 $ 40,000 The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $157,000 B) $154,000 C) $161,000 D) $197,000

Answer 1

Schedule of Cost of goods manufactured

Direct materials:
Beginning raw material inventory	10,000
Add: Purchases of raw material	36,000
Total raw materials available	46,000
Less: Ending raw materials inventory	- 21,000
Less: Indirect materials	- 4,000
Direct materials used in production		21,000
Direct labor		58,000
Manufacturing overhead applied to work in process		90,000
Total manufacturing cost		169,000
Add: Beginning work in process inventory		62,000
Less: Ending work in process inventory		- 70,000
Cost of goods manufactured		161,000

• Schedule of cost of goods sold

Beginning finished goods inventory	36,000
Add: Cost of goods manufactured	161,000
Cost of goods available for sale	197,000
Less: Ending finished goods inventory	- 40,000
Unadjusted cost of goods sold	157,000
Less: over applied overhead	- 3,000
Adjusted cost of goods sold	154,000

Adjusted cost of goods sold = $154,000

Correct option is (B)

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