ACC117 Final Exam (FAI × (- eztornheducation.comhm.tpx 6. value: 6.00 points Cer

Question

ACC117 Final Exam (FAI × (- eztornheducation.comhm.tpx 6. value: 6.00 points Cerrone Inc. has provided the following data for the month of July. The balance in the Finished Goods inventory account at thee beginning of the month was $39,000 and at the end of the month was $47,000. The cost of goods manufactured for the month was $188,000. The actual manufacturing overhead cost incurred was $71,000 and the manufacturing overhead cost applied to Work in Process was $67.000. The adjusted cost of goods sold that would appear on the income statement for July is: O $196.000 O $184,000 $180,000 O $188,000 References Type here to search 7:19 PM Qs 12/12/2017

Explanation / Answer

Correct answer is Option B i.e. $184,000

Explanation:

Manufacturing overhead underapplied (overapplied) = Actual manufacturing overhead incurred Manufacturing overhead applied

...................................................................................= $71,000 $67,000

...................................................................................= $4,000 underapplied

Adjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured Ending finished goods inventory + Manufacturing overhead underapplied

............................................= $39,000 + $188,000 $47,000 + $4,000

............................................= $184,000

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