Echenko Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company's Finished Goods inventory account was debited for $380,000 and credited for $335,500. The ending balance in the Finished Goods inventory account was $62,300. At the end of the year, manufacturing overhead was overapplied by $2,900.
-The balance in the Finished Goods inventory account at the beginning of the year was:

Question

Quizplus · Accepted Answer

Ending finished goods inventory = Beginning finished goods inventory + Debits - Credits
$62,300 = Beginning finished goods inventory + $380,000 - $335,500
Beginning finished goods inventory = $62,300 - $380,000 + $335,500 = $17,800

Echenko Corporation Uses a Job-Order Costing System and Applies Overhead