Question

Abramov Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In May the company completed job N29W that consisted of 22,200 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job N29W shows that the job's total cost was $737,040. During the month, the actual manufacturing overhead cost incurred was $227,180 and the manufacturing overhead cost applied was $212,380. Also during the month, 7,400 completed units from job N29W were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for May is closest to:______

a. $737,040
b. $714,540
c. $245,680
d. $250,600

Answer 1

The correct option is C

Step-by-step explanation:

As per given information, the total production cost for N29W job in May has been documented as $737,040.

For the same month and same job, the total units produced were 22200

Cost of producing one unit = Total cost/ total units

=$737,040./22,200 units

=$33.2 per unit

This is the cost of one unit without any adjustment

Now the total number of goods sold without any adjustment are 7400. Cost actually incurred in these would be

= $33.2 × 7,400

= $245,680

Hence the option C is the correct one

Answer 2

Option c is correct

$245,680

Step-by-step explanation:

The total manufacturing cost = $737,040.

Units produced = 22,200

Cost per unit before adjustment for absorbed overhead=

=$737,040./22,200 units

=$33.2 per unit

Cost of goods sold before adjustment for overheads

= (cost per unit × units sold)

= $33.2 × 7,400

= $245,680