Hubley Inc. uses a job-order costing system in which any underapplied or overapp

Question

Hubley Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month. The company has provided the following data for August:

The cost of goods sold that appears on the income statement for August and that has been adjusted for any underapplied or overapplied overhead is closest to:

$238,300

$222,400

$242,600

$246,900

Direct materials $ 66,500 Direct labor cost S 93,000 Manufacturing overhead cost incurred $ 60,800 Manufacturing overhead cost applied $ 65,100

Explanation / Answer

manufacturing cost incurred during the period = direct material +direct labor +overhead applied

      = 66500+93000+65100

     = 224600

cost of goods manufactured = beginning WIP + manufacturing cost - ending WIP

   = 16000+224600-18200

    = 222400

cost of goods sold (unadjusted) = 56200+222400-36000

            = 242600

overapplied overhead = actual -applied

    = 60800-65100=-4300

cost of goods sold (adjusted) = 242600-4300 = 238300

correct option is " A"

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.