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

Question

Zander Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In July the company completed job F21X that consisted of 16,500 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job F21X shows the following costs:

During the month, the actual manufacturing overhead cost incurred was $313,500 and 11,000 completed units from job F21X were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for July is closest to:

$1,153,350

$1,092,300

$768,900

$766,100

Beginning balance $61,050 Direct materials $551,100 Direct labor cost $224,400 Manufacturing overhead cost applied $316,800

Explanation / Answer

correct option is "C" - 768900

cost of goods manufactured = 61050+551100+224400+316800=1153350

cost of goods sold [unadjusted[ = cost of goods manufactured * unit sold /unit manufactured

                      = 1153350*11000/16500 = $ 768900

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