4. Before prorating the manufacturing overheed costs at the end of 2012, the Cos

Question

4. Before prorating the manufacturing overheed costs at the end of 2012, the Cost or Goods Sold and Finished Goods Inventory had applied overheed costs of $58,950 and $20,400 In them, respectively There was no Work-In-Process at the beginning or end of 2012 During the year, manufacturing overhead costs of Ss incurred. The balance in the Applied Manufacturing Overheed was $79,350 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 $913 O $955 O $2637 O $1.228. O Type here to search UD 19 8

Explanation / Answer

A.$913.

actual overhead = $75,800

applied overhead = $79,350

overapplied overhead = 79,350 - 75,800 =>$3,550.

overapplication applied to inventory = overapplication * (inventory balance ) / total applied overhead

$3550 * (20,400 / 79,350)

=>$912.67....(two decimals)

=>$913 (nearest dollar).

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