Before prorating the manufacturing overhead costs at the end of 2012, the Cost o

Question

Before prorating the manufacturing overhead costs at the end of 2012, the Cost of Goods Sold and Finished Goods Inventory had applied overhead costs of $67,050 and $22,700 in them, respectively. There was no Work-in-Process at the beginning or end of 2012. During the year, manufacturing overhead costs of $85,800 were actually incurred. The balance in the Applied Manufacturing Overhead was $89,750 at the end of 2012. If the under or overapplied overhead is prorated between Cost of Goods Sold and the inventory accounts, how much will be allocated to the Finished Goods Inventory? (round your answer to the nearest dollar amount.)

$999.

$1,045.

$1,337.

$2,951.

Explanation / Answer

Over applied overhead 89,750-85,800 = 3,950 Adjustment for finished finished goods $3,950/89,750*22,700 999

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