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

Question

Catala 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 March: Total manufacturing costs $ 124,000 Manufacturing overhead cost incurred $ 59,000 Manufacturing overhead cost applied $ 63,000 Inventories: Beginning Ending Work in process $20,000 $17,000 Finished goods $57,000 $47,000 The cost of goods manufactured for March is closest to: $127,000 $120,000 $123,000 $124,000

Explanation / Answer

Solution:

Cost of goods manufactured = Total manufacturing cost + beg. WIP - Ending WIP

= $124,000 + 20,000 - 17,000 = $127,000

THUS, answer is option (1)

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