The Bridlewood Manufacturing Company uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes out any balance in the Manufacturing Overhead account to Cost of Goods Sold. During the year the company's Finished-Goods inventory account was debited for $125,000 and credited for $110,000. The ending balance in the Finished-Goods inventory account was $28,000. At the end of the year, manufacturing overhead was overapplied by $4,500. What was the balance in the Finished-Goods inventory account at the beginning of the year?

Question

Quizplus · Accepted Answer

The beginning balance in the Finished-Goods inventory account can be calculated by taking the ending balance ($28,000), adding the cost of goods sold ($110,000), and subtracting the cost of goods manufactured ($125,000). This gives a beginning balance of $13,000.

The Bridlewood Manufacturing Company Uses a Job-Order Costing System and Applies