Erholm Inc.has provided the following data for the month of March.The balance in the Finished Goods inventory account at the beginning of the month was $43,000 and at the end of the month was $42,000.The cost of goods manufactured for the month was $221,000.The actual manufacturing overhead cost incurred was $45,000 and the manufacturing overhead cost applied to jobs was $49,000.The adjusted cost of goods sold that would appear on the income statement for March is:

Question

Quizplus · Accepted Answer

Unadjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory = $43,000 + $221,000 - $42,000 = $222,000
Manufacturing overhead applied - Manufacturing overhead incurred = $49,000 - $45,000 = $4,000 overapplied
Adjusted cost of goods sold = $222,000 - $4,000 = $218,000