Question

Crombie Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month. The company has provided the following data for June:

Direct materials $44,250
Direct labor cost 76,750
Manufacturing overhead
cost incurred $69,500
Manufacturing overhead
cost applied $73,330
Inventories: Beginning Ending
Work in process $17,700 $27,160
Finished goods $67,680 $36,400
The unadjusted cost of goods sold (in other words, cost of goods sold before adjusting for any underapplied or overapplied overhead) for June is closest to:_____.
a. $216,150.
b. $212,320.
c. $194,330.
d. $184,870.

Answer 1

COGS= $216,150

Step-by-step explanation:

First, we need to calculate the cost of goods manufactured:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 17,700 + 44,250 + 76,750 + 73,330 - 27,160

cost of goods manufactured= $184,870

Now, we can determine the unadjusted cost of goods sold:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 67,680 + 184,870 - 36,400

COGS= $216,150