Question

enkins Company had the following information for the year: Direct materials used $ 301,100 Direct labor incurred (9,300 hours) $ 252,600 Actual manufacturing overhead incurred $ 420,000 Jenkins Company used a predetermined overhead rate using estimated overhead of $368,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $19,700. What was adjusted cost of goods sold

Answer 1

The adjusted cost of goods sold is $86,710

Step-by-step explanation:

The actual cost of production incurred = Direct materials used + Direct labor incurred + Actual manufacturing overhead incurred

= $301,100 + $252,600 + $420,000

= $973,100

Actual costs of goods sold = $973,100 - $19,700

= $953,400

Direct labor cost per hour = $252,600 / 9,300 hours

= $27.16 per hour

Estimated direct labor cost = $252,600 / 9,300 × 8,000

= $217,290

Total estimated cost of production = $301,100 + $217,290 + $368,000

= $886,390

Estimated cost of goods sold = $886,390 - $19,700

= $866,690

Therefore,

Adjusted cost of goods sold =

$953,400 - $866,690

= $86,710