Heiny Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In March, the company completed job G59N that consisted of 21,000 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job G59N shows that the job's total cost was $940,800. During the month, the actual manufacturing overhead cost incurred was $269,640 and the manufacturing overhead cost applied was $249,900. And during the month, 6,000 completed units from job G59N were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for March is closest to:

Question

Quizplus · Accepted Answer

The unadjusted cost of goods sold is calculated by taking the cost per unit of the completed job and multiplying it by the number of units sold. The total cost of job G59N is $940,800 for 21,000 units, so the cost per unit is $940,800 / 21,000 = $44.80. For 6,000 units sold, the unadjusted cost of goods sold is 6,000 * $44.80 = $268,800.

Heiny Inc Uses a Job-Order Costing System in Which Any Underapplied