Under absorption costing,the cost of goods sold for the year would be:
A)$206,400
B)$345,600
C)$278,400
D)$360,000

Question

Quizplus · Accepted Answer

Under absorption costing, the cost of goods sold includes all manufacturing costs (direct materials, direct labor, and manufacturing overhead) and the fixed manufacturing overhead is absorbed into the cost of goods sold. 
Cost of goods sold = Direct materials + Direct labor + Manufacturing overhead + Fixed manufacturing overhead absorption 
= $120,000 + $80,000 + $100,000 + ($345,600 - $300,000) 
= $206,400 + $45,600 
= $252,000 
Therefore, the correct answer is B, $345,600.

Under Absorption Costing,the Cost of Goods Sold for the Year