Question

The following information is for MTC Harry Company:

Answer 1

Answer:

Results are below.

Explanation:

First, we need to calculate the total manufacturing costs:

total manufacturing costs= Raw materials used in production as direct materials + Direct labor costs + (Manufacturing overhead (actual) - Under-applied manufacturing overhead)

total manufacturing costs= 95,000 + 100,000 + (250,000 - 25,000)

total manufacturing costs= $420,000

Now, the cost of goods manufactured:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 130,000 + 420,000 - 145,000

cost of goods manufactured= $405,000

Finally, the cost of goods sold:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 65,000 + 405,000 - 80,000

COGS= $390,000