Toan Inc. uses a job-order costing system in which any underapplied or overappli

Question

Toan Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In September the company completed job S80M that consisted of 23,000 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job S80M shows the following costs: Beginning balance $ 66,700 Direct materials $494,500 Direct labor cost $158,700 Manufacturing overhead cost applied $269,100 During the month, the actual manufacturing overhead cost incurred was $270,020 and 3,000 completed units from job S80M were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for September is closest to: $989,000 $129,000 $129,120 $922,300

Explanation / Answer

Calculate unadjusted cost of goods sold :

Unadjusted cost of goods sold = 989000/23000*3000 = $129000

So answer is b) $129000

Beginning balance 66700 Direct material 494500 Direct labour 158700 Manufacturing overhead applied 269100 Total Cost of job 989000

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