Question

Auckland Co. had a credit balance in their factory overhead account at the end of 2013 overhead of $84,000. Before adjusting for their over or under applied overhead their ending inventories had the following balances: Direct material $250,000, WIP $ 350,000, and Finished goods $ 600,000. Also the unadjusted Cost of goods sold account has a balance of $400,000. Required: A. Using the direct method how much was the adjustment to COGS B. Using the pro-rated method how much was the adjustment to COGS, and if gross margin was $225,000 what wad the impact on gross margin? Problem 5.

          Auckland Co. had a credit balance in their factory overhead account at the end of
2013 overhead of $84,000. Before adjusting for their over or under applied
overhead their ending inventories had the following balances: Direct material
$250,000, WIP $ 350,000, and Finished goods $ 600,000. Also the unadjusted Cost of
goods sold account has a balance of $400,000.
Required:
A. Using the direct method how much was the adjustment to COGS
B. Using the pro-rated method how much was the adjustment to COGS, and if
gross margin was $225,000 what wad the impact on gross margin?
Problem 5.

Auckland Co. had a credit balance in their factory overhead account at the end of
2013 overhead of 84,000. Before adjusting for their over or under applied
overhead their ending inventories had the following balances: Direct material250,000, WIP 350,000, and Finished goods 600,000. Also the unadjusted Cost of
goods sold account has a balance of 400,000.
Required:
A. Using the direct method how much was the adjustment to COGS
B. Using the pro-rated method how much was the adjustment to COGS, and if
gross margin was225,000 what wad the impact on gross margin?
Problem 5.

Added by Gerald W.

Question

Please give Ace some feedback