Harlow Company provided the following inventory information for 2021: January 1

Question

 Harlow Company provided the following inventory information for 2021:                           January 1            December 31 Direct materials          14,000                23,000 Work in process           22,000                49,000 Finished goods            76,000                61,000  The following additional information was available for 2021:  Indirect materials .................................  $ 29,000 Depreciation on copier in the sales office .........    14,000 Prime costs ........................................   207,000 Utilities on the factory ...........................    24,000 CEO Salary .........................................   165,000 Property tax on the factory building ...............    21,000 Direct labor .......................................   103,000 Sales commissions ..................................    61,000 Production supervisor's salary .....................    48,000 Cost of goods sold (unadjusted) ....................   305,000 Advertising ........................................    53,000  Assume the overhead variance is closed directly into cost of goods sold.  Calculate the cost of goods sold reported by Harlow Company for 2021 after the overhead variance has been closed.

Explanation / Answer

Actual overhead :

Cost of goods manufactured = 305000+61000-76000 = 290000

Total manufacturing cost = 290000+49000-22000 = 317000

Total manufacturing cost = Direct material+direct labour+manufacturing overhead

317000 = 207000+X

Manufacturing overhead applied = 110000

Actual overhead = 122000

Under applied overhead = 122000-110000 = 12000

Adjusted cost of goods sold = 305000+12000 = $317000

So answer is $317000

Indirect material 29000 Utilities on factory 24000

  Property tax on the factory building

21000

  Production supervisor's salary

48000 Total actual overhead 122000

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