Feltman Inc.uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month.The company has provided the following data for July: The cost of goods sold that appears on the income statement for July and that has been adjusted for any underapplied or overapplied overhead is closest to:

Question

Feltman Inc.uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month.The company has provided the following data for July:   The cost of goods sold that appears on the income statement for July and that has been adjusted for any underapplied or overapplied overhead is closest to:

Quizplus · Accepted Answer

To calculate the cost of goods sold, we first need to calculate the total manufacturing costs incurred during July.

Direct materials: $40,000 + $60,000 = $100,000 
Direct labor: $25,000 + $50,000 = $75,000 
Manufacturing overhead: $30,000

Total manufacturing costs: $205,000

Next, we need to calculate the total cost of goods completed during July:

Beginning work in process: $0 
Add: Total manufacturing costs: $205,000 
Less: Ending work in process: $24,000

Total cost of goods completed: $181,000

Finally, we need to adjust for any underapplied or overapplied overhead. We are told that any such amounts are closed out to cost of goods sold at the end of the month. Therefore, we can simply use the adjusted cost of goods completed as the cost of goods sold:

Cost of goods sold: $181,000

Therefore, the best choice is B ($181,000).