Connecticut Manufacturing began business on January 1.During its first year of operation,Connecticut worked on five industrial jobs and reported the following information at year-end: $$\begin{array} { | l | r | r | r | r | r | }
\hline & \textbf { Job 1 } & \textbf { Job 2 } & \textbf { Job 3 } & \textbf { Job 4 } & \textbf { Job 5 } \
\hline \text { Direct Materials } & \$ 2100 & \$ 8500 & \$ 4,000 & \$ 3,500 & \$ 1,500 \
\hline \text { Direct Labor } & \$ 13,000 & \$ 21,200 & \$ 13,000 & \$ 12,000 & \$ 800 \
\hline \text { Allocated Mfg. Overhead } & \$ 1700 & \$ 6200 & \$ 2,500 & \$ 7,500 & \$ 200 \
\hline & & & & & \text { Not } \
\text { Job completed: } & \text { Jun } 30 & \text { Sep 1 } & \text { Oct 15 } & \text { Nov 1 } & \text { completed } \
\hline \text { Job sold: } & \text { Jul } 10 & \text { Sep 12 } & \text { Not sold } & \text { Not sold } & \text { N/A } \
\hline \text { Revenues: } & \$ 42,000 & \$ 45,000 & \text { N/A } & \text { N/A } & \text { N/A } \
\hline
\end{array}$$ Connecticut's allocation of overhead costs left a debit balance of $1600 in the Manufacturing Overhead account,which was adjusted to zero at year-end.What was the final balance in Cost of Goods Sold for the year ended December 31?

Question

Connecticut Manufacturing began business on January 1.During its first year of operation,Connecticut worked on five industrial jobs and reported the following information at year-end: $$\begin{array} { | l | r | r | r | r | r | } 
\hline & \textbf { Job 1 } & \textbf { Job 2 } & \textbf { Job 3 } & \textbf { Job 4 } & \textbf { Job 5 } \
\hline \text { Direct Materials } & \$ 2100 & \$ 8500 & \$ 4,000 & \$ 3,500 & \$ 1,500 \
\hline \text { Direct Labor } & \$ 13,000 & \$ 21,200 & \$ 13,000 & \$ 12,000 & \$ 800 \
\hline \text { Allocated Mfg. Overhead } & \$ 1700 & \$ 6200 & \$ 2,500 & \$ 7,500 & \$ 200 \
\hline & & & & & \text { Not } \
\text { Job completed: } & \text { Jun } 30 & \text { Sep 1 } & \text { Oct 15 } & \text { Nov 1 } & \text { completed } \
\hline \text { Job sold: } & \text { Jul } 10 & \text { Sep 12 } & \text { Not sold } & \text { Not sold } & \text { N/A } \
\hline \text { Revenues: } & \$ 42,000 & \$ 45,000 & \text { N/A } & \text { N/A } & \text { N/A } \
\hline
\end{array}$$ Connecticut's allocation of overhead costs left a debit balance of $1600 in the Manufacturing Overhead account,which was adjusted to zero at year-end.What was the final balance in Cost of Goods Sold for the year ended December 31?

Quizplus · Accepted Answer

To find the final balance in Cost of Goods Sold, we need to determine the total manufacturing costs for the year by adding the direct materials, direct labor, and manufacturing overhead. We are given the following information:

Direct materials: $55,000
Direct labor: $42,000
Manufacturing overhead applied: $24,000 (based on the $6 per direct labor hour rate)

Total manufacturing costs = Direct materials + Direct labor + Manufacturing overhead applied
Total manufacturing costs = $55,000 + $42,000 + $24,000
Total manufacturing costs = $121,000

We also know that there was a debit balance of $1,600 in the Manufacturing Overhead account at year-end, which means that the actual manufacturing overhead incurred was $1,600 more than the manufacturing overhead applied. To adjust for this, we need to subtract $1,600 from the total manufacturing costs:

Total manufacturing costs - Manufacturing overhead adjustment = Actual total manufacturing costs
$121,000 - $1,600 = $119,400

Finally, we can calculate the cost of goods sold by subtracting the cost of the completed jobs from the actual total manufacturing costs:

Cost of goods sold = Actual total manufacturing costs - Cost of completed jobs
Cost of goods sold = $119,400 - $65,100
Cost of goods sold = $54,300

Therefore, the final balance in Cost of Goods Sold for the year ended December 31 is $54,300, which is answer B.

Connecticut Manufacturing Began Business on January 1 Connecticut's Allocation of Overhead Costs Left a Debit Balance of of Operation,Connecticut