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 $58,350 and $20,300 in them, respectively. There was no Work-in-Process at the beginning or end of 2012. During the year, manufacturing overhead costs of $75,000 were actually incurred. The balance in the Applied Manufacturing Overhead was $78,650 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.)

Explanation / Answer

Details Cost of Goods sold FG Inventory Total Applied overhead cost        58,350.00    20,300.00    78,650.00 % of allocation 74.19% 25.81% Overhead Incurred    75,000.00 Overhead overapplied      3,650.00 Overapplied Overhead to be credited in the allocation ratio           2,707.91          942.09 So overapplied overhead allocated to FG = $     942.09

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