Solution-Compute the adjusted cost of goods sold

Compute the adjusted cost of goods sold

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Reference no: EM132825584

Question - The following cost data relate to the manufacturing activities of the Fly Corp. last year:

Actual manufacturing overhead costs incurred:

Indirect materials $1,200

Indirect labor 5,000

Property taxes 1,500

Utilities, factory 1,300

Depreciation, factory 12,000

Insurance, factory 3,000

Total $24,000

Other costs incurred:

Purchases of raw materials $16,000

Direct labor cost $20,000

Inventories:

	Beginning	Ending
Raw Material	$4,000	$3,500
Work in Process	3,000	3,750
Finished Goods	6,000	7,400

The company uses a predetermined overhead rate to apply manufacturing overhead. The rate is $5.00 per machine-hour; a total of 5,000 machine-hours is recorded for the year.

Required -

a. Compute the direct materials used for the year.

b. Compute the applied manufacturing overhead for the year. Does the firm have overapplied or underapplied overhead?

c. Compute the cost of goods manufactured for the year.

d. Compute the adjusted cost of goods sold for the year assuming the company closed out all underapplied or overapplied overhead to cost of goods sold.

Reference no: EM132825584

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Compute the adjusted cost of goods sold

Reference no: EM132825584

Reference no: EM132825584

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