Phoenix Corporation The records of Phoenix Corporation revealed the following data for the current year.

Work in Process $ 73,150

Finished Goods 115,000

Cost of Goods Sold 133,650

Direct Labor 111,600

Direct Material 84,200

Refer to Phoenix Corporation.Assume that Phoenix has underapplied overhead of $10,000 and that this amount is immaterial.What is the balance in Cost of Goods Sold after the underapplied overhead is closed?

Question

Phoenix Corporation The records of Phoenix Corporation revealed the following data for the current year.

Work in Process	$ 73,150
Finished Goods	115,000
Cost of Goods Sold	133,650
Direct Labor	111,600
Direct Material	84,200

Refer to Phoenix Corporation.Assume that Phoenix has underapplied overhead of $10,000 and that this amount is immaterial.What is the balance in Cost of Goods Sold after the underapplied overhead is closed?

Quizplus · Accepted Answer

When overhead is underapplied, it means that the actual overhead costs were higher than what was allocated to the products. Therefore, the Cost of Goods Sold (COGS) needs to be increased by the amount of underapplied overhead. The original COGS is $133,650, and adding the underapplied overhead of $10,000 results in a new COGS of $143,650.

Phoenix Corporation the Records of Phoenix Corporation Revealed the Following Data for Data