Question

Jenkins Company had the following information for the year:

Direct materials used	$	299,900​
Direct labor incurred (9000 hours)	$	246,500​
Actual manufacturing overhead incurred	$	435,000​

Jenkins Company used a predetermined overhead rate using estimated overhead of $411,600 and 8400 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $19,100. What was adjusted cost of goods sold?

$987,400

$962,300

$981,400

$968,300

Answer 1

S962,300 Predetermined overhead rate (POHR) = Estimated Total Manufacturing Overhead Cost/Estimated Units in the Allocation Base $411,600 / 8,400 $49.00 per DLH Total applied manufacturing overhead = POHR x actual amount of allocation based used 9,000 hours x $49.00 $441,000 Cost of goods manufactured Direct Materials Direct labor Manufacturing Overhead Less: Finish Goods Cost of goods manufactured $299,900 $246,500 $441,000 $19,100 $968,300 $6,000 Overapplied overhead ($441,000 - $435,000) S962,300 Adjusted cost of goods ($968,300 - $6,000)