Question

The following amounts were reported by Howe Company before adjusting its immaterial overapplied manufacturing overhead of $16,000. Raw Materials Inventory $80,000 Finished Goods Inventory $120,000 Work in Process Inventory $200,000 Cost of Goods Sold $1,460,000. What is the amount Howe will report as cost of goods sold after it disposes of its overapplied overhead

Answer 1

$1,444,000

Step-by-step explanation:

Given the data as seen below,

Over applied manufacturing overhead = $16,000

Raw materials inventory= $80,000

Finished goods inventory = $120,000

Work in process inventory = $200,000

Cost of goods sold = $1,460,000

Therefore, the amount Howe will report as cost of goods sold after it disposes off its overhead applied will be;

= Cost of goods sold - over applied manufacturing overhead

= $1,460,000 - $16,000

= $1,444,000