Fletcher, Inc. disposes of under- or overapplied overhead at year-end as an adju

Question

Fletcher, Inc. disposes of under- or overapplied overhead at year-end as an adjustment to cost of goods sold. Prior to disposal, the firm reported cost of goods sold of $614,000 in a year when manufacturing overhead was underapplied by $22,400. If sales revenue totaled $1,770,000, determine (1) Fletcher's adjusted cost of goods sold and (2) gross margin.

Choice A

Choice B

Choice C

Choice D

Choice E

Adjusted Cost
of Goods Sold Gross Margin A.         $ 591,600 $ 1,156,000 B.         $ 591,600 $ 1,178,400 C.         $ 614,000 $ 1,156,000 D.         $ 636,400 $ 1,133,600 E.         $ 636,400 $ 1,156,000

Explanation / Answer

Reported cost of goods sold

614000

Add: Manufacturing overheads under applied

22400

Adjusted cost of goods sold

636400

Sales

1770000

-Adjusted cost of goods sold

636400

Gross profit

1133600

So the correct option is D

--------------------------------------------------------------------------------------------------------------------------

Feel free to comment if you need further assistance J

Pls rate this answer if you found it useful.

Reported cost of goods sold

614000

Add: Manufacturing overheads under applied

22400

Adjusted cost of goods sold

636400

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.