Question

Manufacturing overhead has an overallocated balance of $7, 500; raw materials inventory balance is $62.000, work in process inventory is $34,000; finished goods inventory is $25,000; and cost of goods sold is $ 135.000 After adjusting for the overallocated manufacturing overhead, what is cost of goods sold?

a. $135,000
b. $142, 500
c. $7, 500
d. $127, 500

Answer 1

Option (b) is correct.

Step-by-step explanation:

Manufacturing overhead has an overallocated balance = $7,500

Cost of goods sold = $135,000

The overallocated manufacturing overhead will be simply added to the cost of goods sold.

After adjusting for the overallocated manufacturing overhead,

Cost of goods sold:

= cost of goods sold + overallocated balance of manufacturing overhead

= $135,000 + $7,500

= $142,500