manufecturing overheed costs at the end of 2016, the Cost of Goods Sold and Fini

Question

manufecturing overheed costs at the end of 2016, the Cost of Goods Sold and Finished Goods Inventory had applied overhead costs of $58,700 and $32.000 in them, respectively. There was no Work-in-Process at the beginning or end Before prorating the of 2016. During the year, manufecturing overheed costs of $B6,000 were actually incurred. The balance in the Applied Menufecturing Overheed was $90,700 at the end of 2016. If the under or overepplied overhead is proreted between Cost of Goods Sold and the inventory sccounts, how much will be allocaled to the Finished Goods Inventory? O $1.658. O $2,562. $3.042. O $2608.

Explanation / Answer

1) Actual overhead = 86000

1) Applied overhead = 90700

Overapplied overhead = 90700-86000 = 4700

Overapplied overhead allocated to inventory = 4700*32000/90700 = 1658

So answer is a) $1658

2) Amount of cost traced on specific product = Direct material+Direct labour

= 113000+106000

Amount of cost traced on specific product = 216000

So answer is c) $216000

3) Journal entry :

So answer is option D

Date account and explanation debit credit Finished goods inventory Work in process inventory

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