Question

Morton Inc. has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $49,000 and at the end of the month was $45,000. The cost of goods manufactured for the month was $226,000. The actual manufacturing overhead cost incurred was $74,000 and the manufacturing overhead cost applied to Work in Process was $70,000. The adjusted cost of goods sold that would appear on the income statement for November is:

Answer 1

Answer:

$234,000

Explanation:

Cost of goods sold = Opening Finished Goods Inventory + cost of goods manufactured - Closing Finished Goods Inventory

                                = $49,000 + $226,000 - $45,000 = $230,000

Under - applied overheads = Actual Overheads - Applied Overheads

                                              = $74,000 - $70,000 = $4,000

Adjusted Cost of goods sold = $230,000 + $4,000 = $234,000

The adjusted cost of goods sold that would appear on the income statement for November is $234,000.