Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 125% of direct labor cost. Selected data concerning the past year's operation of the company are presented below.$\begin{array}{lrrr}
& \text { January 1 } & \text { December 31 } \
\text { Direct materials } & \$ 77,000 & \$ 40,000 \
\text { Work in process } & 66,000 & 42,000 \
\text { Finished goods } & 115,000 & 100,000\
\text { Other information }\
\text { Direct materials purchases } && \$ 324,000 \
\text { Cost of goods available for sale } && 950,000 \
\text { Actual factory overhead costs } && 260,000
\end{array}$The cost of goods sold (before adjustment for under or overapplied overhead) is:

Question

Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 125% of direct labor cost. Selected data concerning the past year's operation of the company are presented below.$\begin{array}{lrrr} 
& \text { January 1 } & \text { December 31 } \
\text { Direct materials } & \$  77,000 & \$ 40,000 \
\text { Work in process } & 66,000 & 42,000 \
\text { Finished goods } & 115,000 & 100,000\
\text { Other information }\
\text { Direct materials purchases } && \$ 324,000 \
\text { Cost of goods available for sale } && 950,000 \
\text { Actual factory overhead costs } && 260,000
\end{array}$The cost of goods sold (before adjustment for under or overapplied overhead) is:

Quizplus · Accepted Answer

The cost of goods sold (before adjustment for under or overapplied overhead) can be calculated as follows:1. Start with the cost of goods available for sale: $950,000.2. Subtract the ending finished goods inventory: $950,000 - $100,000 = $850,000.Therefore, the correct answer is $850,000.

Randall Company Manufactures Products to Customer Specifications The Cost of Goods Sold (Before Adjustment for Under or System