Asked by judas sanchez on Jun 17, 2024
Verified
Cienfuegos Corporation has provided the following data concerning last month's operations. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold?
A) $157,000
B) $154,000
C) $161,000
D) $197,000
Underapplied Manufacturing Overhead
Underapplied manufacturing overhead occurs when the allocated manufacturing overhead costs are less than the actual costs incurred, indicating a shortfall that needs to be addressed in financial accounts.
Overapplied Manufacturing Overhead
A situation where the allocated manufacturing overhead costs exceed the actual overhead costs incurred.
Adjusted Cost
The net cost of an asset after adjustments for factors such as depreciation, improvements, or disposals, used in financial and tax reporting.
- Learn about the idea of cost of goods sold (COGS) and its related adjustments.
- Mobilize knowledge on the application and adjustment of manufacturing overhead in cost assessment.
Verified Answer
= $150,000 + $1,000 - $3,000
= $154,000. Therefore, the correct answer is B.
Learning Objectives
- Learn about the idea of cost of goods sold (COGS) and its related adjustments.
- Mobilize knowledge on the application and adjustment of manufacturing overhead in cost assessment.
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