Question

Morton Inc. has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $50,000 and at the end of the month was $46,000. The cost of goods manufactured for the month was $236,000. The actual manufacturing overhead cost incurred was $84,000 and the manufacturing overhead cost allocated to Work in Process was $80,000. The adjusted cost of goods sold that would appear on the income statement for November is

Answer 1

Answer:

Cost of goods sold = $244,000

Explanation:

We will calculate the manufacturing overhead underapplied or over applied

Manufacturing overhead underapplied= Incurred overhead- Overhead applied

Manufacturing overhead underapplied= 84,000- 80,000

Manufacturing overhead underapplied= $4,000

Cost of goods sold= Start finished good inventory- Ending finished good inventory + cost of good manufactured + overhead underapplied

Cost of goods sold= 50,000 - 46,000 + 236,000 + 4,000

Cost of goods sold = $244,000