Finished Goods beginning and ending balances are $23,000 and $17,000, respectively. The cost of goods manufactured for the period was $187,500. Actual manufacturing overhead for the period was $32,000 and applied overhead was $34,000. The adjusted cost of goods sold was:

Question

Quizplus · Accepted Answer

Adjusted cost of goods sold = (Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory)
Adjusted cost of goods sold = ($23,000 + $187,500 - $17,000)
Adjusted cost of goods sold = $193,500
Since the applied overhead was greater than the actual overhead, we can ignore it in the calculation of adjusted cost of goods sold. Therefore, the correct answer is A.

Finished Goods Beginning and Ending Balances Are $23,000 and $17,000