At the beginning of the year, Springfield Manufacturing had the following account balances: The following additional details are provided for the year:
$$\begin{array} { | l | l |}
\hline \text { Direct materials placed in production } & \$ 83,000 \
\hline \text { Direct labor incurred } & 194,000 \
\hline \text { Manufacturing overhead incurred } & 303,000 \
\hline \text { Manufacturing overhead allocated to production } & 293,000 \
\hline \text { Cost of jobs completed and transferred } & 500,000 \
\hline \text { Total revenue } & 754,000 \
\hline \text { Cost of goods sold (before adjustment) } & 442,200 \
\hline
\end{array}$$ After recording all these transactions and adjusting for the over/underallocated overhead, the ending balance in the Cost of Goods Sold account is a ________.

Question

At the beginning of the year, Springfield Manufacturing had the following account balances:      The following additional details are provided for the year:
$$\begin{array} { | l | l |} 
\hline \text { Direct materials placed in production } & \$ 83,000 \
\hline \text { Direct labor incurred } & 194,000 \
\hline \text { Manufacturing overhead incurred } & 303,000 \
\hline \text { Manufacturing overhead allocated to production } & 293,000 \
\hline \text { Cost of jobs completed and transferred } & 500,000 \
\hline \text { Total revenue } & 754,000 \
\hline \text { Cost of goods sold (before adjustment) } & 442,200 \
\hline
\end{array}$$ After recording all these transactions and adjusting for the over/underallocated overhead, the ending balance in the Cost of Goods Sold account is a ________.

Quizplus · Accepted Answer

To find the ending balance in the Cost of Goods Sold (COGS) account, we need to calculate the total manufacturing costs for the year and subtract the cost of goods completed and sold. 
Total Manufacturing Costs = Direct Materials + Direct Labor + Manufacturing Overhead
Total Manufacturing Costs = $3,100,000 + $1,500,000 + $600,000 = $5,200,000

Cost of Goods Completed and Sold = Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory
Cost of Goods Completed and Sold = $500,000 + $5,200,000 - ($400,000 + $150,000) = $5,150,000

Ending Balance in COGS = Beginning Balance + Cost of Goods Sold - Cost of Goods Completed and Sold
Ending Balance in COGS = $120,000 + $4,800,000 - $5,150,000 = $770,000

Since the Cost of Goods Sold account has a normal debit balance, the ending balance in COGS is a debit of $452,200 (Option B).

At the Beginning of the Year, Springfield Manufacturing Had the Following