Homework SourseHubley Inc uses a joborder costing system in which any under
Hubley Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month. The company has provided the following data for August:
The cost of goods sold that appears on the income statement for August and that has been adjusted for any underapplied or overapplied overhead is closest to:
$238,300
$222,400
$242,600
$246,900
| Direct materials | $ | 66,500 |
| Direct labor cost | S | 93,000 |
| Manufacturing overhead cost incurred | $ | 60,800 |
| Manufacturing overhead cost applied | $ | 65,100 |
Solution
manufacturing cost incurred during the period = direct material +direct labor +overhead applied
= 66500+93000+65100
= 224600
cost of goods manufactured = beginning WIP + manufacturing cost - ending WIP
= 16000+224600-18200
= 222400
cost of goods sold (unadjusted) = 56200+222400-36000
= 242600
overapplied overhead = actual -applied
= 60800-65100=-4300
cost of goods sold (adjusted) = 242600-4300 = 238300
correct option is \" A\"
