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 $61.850 and $21.200 in them, respectively. There was no Work in Process at the beginning or end of 2012. During the year, manufacturing overhead costs of $79.400 were actually incurred. The balance in the Applied Manufacturing overhead was $83,050 at the end of 2012 f 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. O $1.251 O $2.718 O $975 O $932.

Explanation / Answer

Balance in Applied Manufacturing Overhead is $83,050

Mfg. Cost during the year is $79,400

Cost to be allocated=83050-79400=3650

Ratio for allocation to Finished goods:21200:83050

Allocation 3650*21200/83050=931.727

Answer is D) $932

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