Question

Jenkins Company had the following information for the year: Direct materials used$295,500 Direct labor incurred (9,000 hours)$250,900 Actual manufacturing overhead incurred$435,000 Jenkins Company used a predetermined overhead rate using estimated overhead of $401,800 and 8,200 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $19,800. What was adjusted cost of goods sold?

Answer 1

Adjusted cost of goods sold was $55,502

Step-by-step explanation:

The Actual Cost of production incurred = Direct materials used + Direct labor incurred + Actual manufacturing overhead incurred = $295,500 + $250,900 + $435,000 = $981,400

Actual Cost of goods sold = $981,400 - $19,800 = $961,600

Direct labor Cost per hour = $250,900/9,000

Estimated direct labor cost = $250,900/9,000 x 8,200 = $228,598

Total Estimated Cost of production = $295,500 + $228,598 + $401,800 = $925,898

Estimated Cost of goods sold = $925,898 - $19,800 = $906,098

Adjusted cost of goods sold = $961,600 - $906,098 = $55,502