Dreckman 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 August the company completed job M27K that consisted of 17, 000 units of one of the company's standard products.No other jobs were in process during the month.The total manufacturing cost for job M27K according to its job cost sheet was $1, 118, 600.During the month, the actual manufacturing overhead cost incurred was $265, 880 and the manufacturing overhead applied was $272, 000.And during the month, 1, 000 completed units from job M27K were sold.No other products were sold during the month. The cost of goods sold that would appear on the income statement for August, after adjustment for any underapplied or overapplied overhead, is closest to:

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Quizplus · Accepted Answer

The cost of goods sold is calculated by adjusting the cost of the sold units for the underapplied or overapplied overhead. The overhead was overapplied by $6,120 ($272,000 applied - $265,880 actual). The cost per unit is $1,118,600 / 17,000 units = $65.80. For 1,000 units sold, the cost is $65,800. Adjusting for the overapplied overhead: $65,800 - $6,120 = $59,680.