Koczela Incorporated has provided the following data for the month of May: Inventories: Additional information:
Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold.The adjusted cost of goods sold that appears on the income statement for May is:
A) $206,000
B) $214,000
C) $208,000
D) $210,000

Question

Koczela Incorporated has provided the following data for the month of May: Inventories:  Additional information:
 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold.The adjusted cost of goods sold that appears on the income statement for May is:
A) $206,000 
B) $214,000 
C) $208,000 
D) $210,000

Quizplus · Accepted Answer

The adjusted cost of goods sold is calculated as follows:

Beginning inventory: $28,000
+ Purchases: $182,000
= Cost of goods available for sale: $210,000
- Ending inventory: $2,000
= Cost of goods sold before adjustment: $208,000

Since there is no information provided about underapplied or overapplied manufacturing overhead, we assume that it is closed out to cost of goods sold. Therefore, the adjusted cost of goods sold is the same as the cost of goods sold before adjustment, which is $208,000.

Koczela Incorporated Has Provided the Following Data for the Month