K Inc. has provided the following data for the month of May: Inventories: Beginning Ending Work in process $ 17,000 $ 12,000 Finished goods $ 46,000 $ 50,000 Additional information: Direct materials $ 57,000 Direct labor cost $ 87,000 Manufacturing overhead cost incurred $ 63,000 Manufacturing overhead cost applied to Work in Process $ 61,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The adjusted cost of goods sold that appears on the income statement for May is:

Question

Jonathon Mahoney

Business

19 September, 07:28

K Inc. has provided the following data for the month of May: Inventories: Beginning Ending Work in process $ 17,000 $ 12,000 Finished goods $ 46,000 $ 50,000 Additional information: Direct materials $ 57,000 Direct labor cost $ 87,000 Manufacturing overhead cost incurred $ 63,000 Manufacturing overhead cost applied to Work in Process $ 61,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The adjusted cost of goods sold that appears on the income statement for May is:

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Yadira Hood · Answer 1

Instructions are listed below

Explanation:

Giving the following information:

Inventories:

Beginning Work in process $ 17,000

Ending WIP = $ 12,000

Beginning Finished goods $ 46,000

Ending Finished goods $ 50,000

Additional information:

Direct materials $ 57,000

Direct labor cost $ 87,000

Manufacturing overhead cost incurred $ 63,000

Manufacturing overhead cost applied $ 61,000

First, we need to calculate the cost of goods manufactured:

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

cost of goods manufactured = 17000 + 57000 + 87000 + 61000 - 12000 = 210,000

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

COGS = 46000 + 210000 - 50000 = 206,000

Adjusted COGS = COGS + under-allocated overhead = 206000 + 2000 = 208,000