Answer:
$546,750
Explanation:
Sales 2,498,000
COGS (1,376,000)
gross profit 1, 112,000
S&A salaries (219,000)
other S&A (346,000)
underapplied MO (10,250) *
net income 536.750
*we need to compare the actual voerhead with the applied overhead:
actual overhead: 176,000 + 420,000 = 596,000
applied overhead:
overhead rate:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
568,000 / 32,000 = 17.75
33,000 x 17.75 = 585.750
overhead
debit credit
596,000 585,750
10,250 underapplied overhead
As the applied was lower it is underapplied we need to recognzie more cot thus, the net income decrease.