Cerrone Inc. has provided the following data for the month of July. The balance

Question

Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $51,800 and at the end of the month was $44,700. The cost of goods manufactured for the month was $246,000. The actual manufacturing overhead cost incurred was $127,400 and the manufacturing overhead cost applied to Work in Process was $121,000. The adjusted cost of goods sold that would appear on the income statement for July is:

$246,700

$253,100

$259,500

$238,900

Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at the beginning of the month was $51,800 and at the end of the month was $44,700. The cost of goods manufactured for the month was $246,000. The actual manufacturing overhead cost incurred was $127,400 and the manufacturing overhead cost applied to Work in Process was $121,000. The adjusted cost of goods sold that would appear on the income statement for July is:

Explanation / Answer

Cost of goods sold = Beginning finished goods + Cost of goods manufactured - Ending finished goods

Cost of goods sold = $51,800 + $246,000 - $44,700 = $253,100

The under application of manufacturing oeread shall be charged to cost of goods sold.

Uner appliation of manufacturing overhead = $127,400 - $121,000 = $6,400

Adjusted cost of goods sold = $253,100 + $6,400 = $259,500

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