Madtack Company's beginning and ending inventories for the month of November were as follows: Madtack applies manufacturing overhead cost to jobs at the rate of 70% of direct labor cost incurred. The company does not close underapplied or overapplied manufacturing overhead to Cost of Goods Sold until the end of the year.
-Madtack Company's Cost of Goods Sold for November was:

Question

Madtack Company's beginning and ending inventories for the month of November were as follows:  Madtack applies manufacturing overhead cost to jobs at the rate of 70% of direct labor cost incurred. The company does not close underapplied or overapplied manufacturing overhead to Cost of Goods Sold until the end of the year.
-Madtack Company's Cost of Goods Sold for November was:

Quizplus · Accepted Answer

First, we need to calculate the total cost of goods manufactured:
Direct materials used: Beginning raw materials inventory + purchases - ending raw materials inventory = $130,000 + $410,000 - $150,000 = $390,000
Direct labor: $240,000
Manufacturing overhead: 70% x $240,000 = $168,000
Total manufacturing costs: $390,000 + $240,000 + $168,000 = $798,000
Cost of goods manufactured: Beginning work in process inventory + total manufacturing costs - ending work in process inventory = $88,000 + $798,000 - $104,000 = $782,000
Now, we can calculate cost of goods sold:
Beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory = $100,000 + $782,000 - $391,000 = $491,000. Therefore, the correct answer is B.

Madtack Company's Beginning and Ending Inventories for the Month of November