Question

The Precision Widget Company had the following balances in their accounts at the end of the accounting period: Work-in-Process $ 5,000 Finished Goods 20,000 Cost of Goods Sold 200,000 If their manufacturing overhead was overallocated by $8,000 and Precision Widget adjusts their accounts using a proration based on total ending balances, the revised ending balance for Cost of Goods Sold would be

Answer 1

$192,880

Step-by-step explanation:

We need to determine the balances for each of the items.

Work in process =(5,000/225,000*100) × 8,000

= 2.2% × 8,000

= 176

Finished goods = (20,000/225,000 *100) × 8,000

= 8.9% × 8,000

= 712

Cost of goods sold = (200,000/225,000 *100) × 8,000

= 88.9% × 8,000

= 7,120

Therefore, the revised ending balance for COGS would be ;

= 200,000 - 7,120

= $192,880