Faughn Corporation has provided the following data concerning manufacturing overhead for July:
The company's Cost of Goods Sold was $243,000 prior to closing out its Manufacturing Overhead account.The company closes out its Manufacturing Overhead account to Cost of Goods Sold.Which of the following statements is true?
A) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000
B) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000
C) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000
D) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000

Question

Faughn Corporation has provided the following data concerning manufacturing overhead for July:
 The company's Cost of Goods Sold was $243,000 prior to closing out its Manufacturing Overhead account.The company closes out its Manufacturing Overhead account to Cost of Goods Sold.Which of the following statements is true?
A) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000 
B) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000 
C) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000 
D) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000

Quizplus · Accepted Answer

11ea7761_18e4_c435_81a5_a1bb70da8519_TB2580_00 Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied manufacturing overhead - Overapplied manufacturing overhead = $243,000 + $0 - $10,000 = $233,000

Faughn Corporation Has Provided the Following Data Concerning Manufacturing Overhead